Basic Parts of Medicare

1. Part A (Hospital Insurance) – helps cover your inpatient care in hospitals, skilled nursing facilities, hospice care, and some home health care if you meet certain conditions.
2. Part B (Medical Insurance) – helps cover medically-necessary services like doctor’s services and outpatient care, other medical services that Part A doesn’t cover such as physical and occupational therapists, and some home health. Part B also helps cover some preventive services to help maintain your health and to keep certain illnesses from getting worse.
3. Part C ( Medicare Advantage Plans) – private insurers like HMOs and PPOs provide Part A, Part B, and, sometimes, Part D coverage to people who enroll.
4. Part D ( Medicare prescription drug coverage) – helps cover prescription drug costs.

Once your understanding of the basic parts of Medicare sinks in, you will be much better prepared to then decide what type of coverage is best for your needs and your budget.

How much does Medicare cost

In most cases your premium for Part B of Medicare in 2012 will be $99.90. It may be higher if you are more wealthy or your premium for Part B may be subsidized if you have a significantly lower income.

Qualifications for low-income subsidies
To qualify for extra help, you must meet at least one condition in each column:
Medicare Part A or B U.S. residency Income and assets
You are entitled to
Medicare Part A
(Hospital Insurance).

OR

You are enrolled in
Medicare Part B
(Medical Insurance). You live in one of the
50 states or the
District of Columbia.2 You are single and
have income of less
than $16,245 and
resources of less than
$12,640.3

OR

You are married and
have income of less
than $21,855 and
resources of less than
$25,260.3

In some cases, Medicare will consider your assets as well as your income to determine if you are eligible for extra help. Assets counted include:

Cash (including checking and savings accounts).
Certificates of deposit.
Retirement accounts (like IRAs or 401(k)s).
Stocks, bonds and mutual funds.
Promissory notes.
Property that can be converted to cash within 20 days.
Mortgages.

Life insurance policies.
Assets not counted include:
Your primary home.

If you qualify for extra help, your premiums and deductibles could be reduced or eliminated. You could also pay lower co-payments for prescriptions, depending on your income and assets.
Medicare Drug Benefit Subsidies for People with Limited Income and Resources4
Low-Income
Subsidy Level Monthly Premium Annual
Deductible
Copayments/
Coinsurance
Medicaid and Single:
Income at or less than $10,830

Married:
Income at or less than $14,570 $05 $0
$1.10 generic
$3.30 brand-name
No drug copays after $4,700 out-of-pocket in 2012
Medicaid and
Single:
Income above $10,830