Here you’ll learn about:

• Original Medicare
• Medicare Part A and Medicare Part B
• What Medicare doesn’t cover

Medicare is a government health insurance program offered to Americans age 65 or older and those with certain disabilities. When it started in 1965, Medicare provided coverage for health care services like doctors’ visits and hospital stays. The program has changed over time to include coverage for preventive care and prescription drugs as well as additional health care options.

You may have heard about different parts of Medicare, such as Parts A, B, C and D. These options for Medicare coverage will be explained throughout these pages. You can choose Original Medicare only, or pair it with a private health plan. You can also choose a private health plan that includes Medicare and additional features and benefits. Examples of these plans include Medicare supplement, Medicare Cost, Medicare Advantage and Prescription Drug plans (PDP).

Original Medicare

Original Medicare has two parts — Part A and Part B. The Centers for Medicare & Medicaid Services (CMS) administers Part A and Part B.

Medicare Part A helps pay for inpatient care in hospitals and skilled nursing facilities. It is offered at no cost to nearly everyone eligible for Medicare.

Medicare Part B helps pay for professional services such as those provided by a doctor and other non-physician professionals, some preventive screenings, lab tests, durable medical equipment and outpatient hospital care. Part B is available for a monthly payment, called a premium, to most people eligible for Medicare.

Many people are automatically enrolled in Part A and Part B by the Social Security Administration when they turn 65.

Part A: Hospital Insurance

Medicare Part A covers inpatient hospital stays, care in a skilled nursing facility and some home health care and hospice care after you pay your deductible and coinsurance. Typically there is no premium for Part A. If you or your spouse has 40 or more quarters of Medicare-covered employment, then your Part A premium has already been paid by your payroll taxes while working.

Hospital services

Part A provides coverage for a semiprivate room, meals and eligible services for up to 90 days per benefit period. A benefit period begins on the first day of a hospital stay and ends when you have been out of the hospital or skilled nursing facility for 60 days in a row. For each benefit period in 2011:

• You pay a deductible of $1,132
• For the first 60 days, eligible charges are covered in full (after you pay the deductible)
• For days 61 through 90, you pay $283 per day
• For your additional 60 lifetime reserve days, you pay $566 per day
• You pay any charges not covered by Medicare

Skilled nursing facility care

Part A covers up to 100 days for eligible care and services in a Medicare-certified skilled nursing facility after a hospital stay of at least three covered days. For each benefit period in 2011:

• For the first 20 days, eligible charges are covered in full
• For days 21 through 100, you pay $141.50 per day

Home health and hospice care

Unlimited visits for eligible home health care are paid in full when ordered by a doctor.

Terminally ill patients may receive drugs for symptom control and pain relief, short-term respite care and home health services. Care must be provided by a Medicare-certified hospice program. Eligible hospice services are paid in full by Medicare.

Part B: Medical Insurance

Medicare Part B covers doctor visits and services, outpatient hospital care, durable medical equipment and some medical services and supplies not covered by Part A. Generally, there is a monthly premium for Part B that you pay to the federal government (this can be deducted from your Social Security check). Keep the Part B premium in mind when deciding what type of Medicare plan you can afford that will meet your health care needs.

What you pay for Part B

In 2011, you pay:

• A monthly Part B premium of $96.40 to $369.10 (determined by income and your eligibility date)
• An annual Part B deductible of $162
• After your annual deductible, you pay 20 percent (Medicare pays 80 percent) of most Medicare-approved charges for eligible services and supplies

Services eligible for Part B coverage

Doctors’ services

• Hospital, clinic, office and home visits
• Surgery
• Osteopathy and radiology

Diagnostic tests

• X-rays
• Lab tests

Medical supplies and services

• Certain diabetes testing supplies
• Surgical dressings; splints, casts and prosthetic devices
• Oxygen, ventilator-assist devices and durable medical equipment used at home
• Portable X-ray services
• Radiation therapy
• Other procedures that are part of your treatment but not covered by Part A

Outpatient services

• Rehabilitation
• Diagnostic and treatment services
• Some services performed at a Medicare-certified ambulatory surgical center

Preventive services covered under Part B:

Original Medicare also covers a yearly “wellness exam” and provides many preventive services and screenings at no cost to you. Preventive services help you and your doctor monitor and manage your health on a regular basis. These services may also uncover a disease or condition in its early stage when more treatment options are available. Your doctor can speak with you about these services and when you might need them.

• A “Welcome to Medicare” physical exam within the first 12 months of your Part B coverage
• A wellness exam once every 12 months (after your first 12 months of Part B coverage)
• Cancer screenings, such as mammograms, colorectal and prostate screenings, Pap tests and pelvic exams
• Cardiovascular screenings once every five years to check cholesterol and other blood fat levels
• Bone mass measurements
• Flu shots, pneumonia and hepatitis B vaccines
• Diabetes and HIV screenings
• Stop-smoking counseling
• Glaucoma tests
• Medical nutrition therapy for those with diabetes or kidney disease, or if referred to the service by a doctor

What Original Medicare doesn’t cover

• Charges for inpatient hospital and skilled nursing days beyond Medicare’s limits
• Certain preventive/routine care services, such as vision exams and hearing screenings
• Most care received outside of the United States
• Prescription drugs not covered by Part A or Part B

Remember: Original Medicare has deductibles and cost-sharing that you must pay and there is no out-of-pocket maximum for those costs. There is no limit to the annual amount of cost-sharing you will be responsible for.

Your options

Medicare Part A and Medicare Part B cover basic hospital and medical needs. Medicare Part A Medicare Part B will probably not cover all of the medical costs you have or meet all the needs of your lifestyle. Hearing screenings, vision exams and most outpatient prescription drugs are not covered.

Fortunately you can enroll in one of several private health plan options to reduce your out-of-pocket costs and get additional services to help you lead a healthy life. These plans include:

• Medicare Cost plans
• Medigap (Medicare supplement) plans
• Medicare Advantage plans
• Prescription drug plans