Medicare: A Quick Overview

Medicare is a Federal health insurance program. It covers most people 65 years old and over, some people younger than 65 with disabilities, people diagnosed with amyotrophic lateral sclerosis (ALS), and those with end-stage renal disease (ESRD).

Medicare is divided into several parts. This fact sheet discusses: Part A, Hospital Insurance and Part B, Medical Insurance. For more information on Medicare Part C (Medicare Advantage Plans) and Part D (the prescription drug benefit), please see our fact sheets Medicare Advantage Overview and Part D Overview at cahealthadvocates.org.

Part A: Hospital Insurance
Part A covers most in-patient hospital care, some in-patient skilled nursing facility care, some home health care, and hospice care.

There is no monthly Part A premium for people who have 40 or more quarters of Social Security credits (about 10 years of full-time work with four quarters per year) and who are eligible for Social Security or Railroad Retirement benefits. People insufficient Security quarters may buy Part A and pay a monthly premium of $451.00 (for 2012).

Part B: Medical Insurance
Part B covers a portion of the Medicare approved costs for out-patient medical services such as doctors’ services, out-patient hospital care, laboratory tests, out-patient physical and speech therapy, some home health care, ambulance services, and some medical equipment and supplies.

Part B coverage is optional. If you or your spouse are still working and you are covered by your employer group health plan, you may not need this part of Medicare until you or your spouse retire. (See our fact sheet Coverage After 65 if You or Your Spouse Works). For people who enroll in Part B and receive Social Security, the Part B monthly premium ($99.90 in 2012, for beneficiaries with individual incomes of $85,000 or less) is automatically deducted from their Social Security check every month. For people who do not receive Social Security, they will be billed quarterly for Part B. Medicare does not offer comprehensive coverage. Even though it pays for some preventive services and covers most medically necessary services, Medicare pays for less than half of what it typically costs beneficiaries for all of their health care expenses. Some examples of items that Medicare will not pay for are: hearing aids, eyeglasses, dental care and long term care at home or in a nursing home, when the care you need is primarily personal care services/custodial care.