What is Medicare?

Medicare is a government-funded health insurance program for American citizens aged 65 and older. A select group under the age of 65 (namely those with disabilities and those afflicted with permanent kidney failure) may also be eligible for Medicare coverage.

Medicare coverage covers most of the medical needs of seniors, but does not guarantee all of them. Medicare only covers the financial cost of living in a nursing home or rehabilitation facility for a temporary period of time (90 days) and does not typically cover chronic illness or caregiving provided at home. Medicare also stipulates certain limitations on the kinds and quantity of medications it will pay for, depending upon the individual situation of the senior covered.

Medicare Plans

Medicare plans provide health insurance in four parts: Parts A, B, C and D. Each part covers separate needs and comes with its own set of limitations.

• Part A (Hospital Insurance): Medicare Part A is premium-free coverage for medical needs, including hospice care, inpatient hospital care and select skilled nursing home services and home health care. Part A does not cover some costs, such as physical and occupational therapy bills.

• Part B (Medical Insurance): Medicare Part B requires that covered seniors pay a monthly premium for health insurance. This part covers both doctor's visits and outpatient hospital care.

• Part C (Medicare Advantage): Medicare Part C allows HMOs, PPOs and POS medical insurance groups to offer health insurance plans to those covered by Medicare. The plans offered must at least include the basic benefits covered by Medicare Parts A and B. Part C typically includes things like dental and vision insurance, though these benefits usually come with restrictions on providers.

• Part D (Prescription Drug Coverage): Medicare Part D is the section of Medicare that covers drug and prescription costs, though seniors who receive benefits must buy into the program by paying a monthly premium. Part D prescription coverage is a joint benefit offered by the government and private insurance companies. Premium rates vary from state to state, and by private insurance company.