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Medicare is a social insurance program administered by the U.S. government to provide health care to Americans over 65 or those with disabilities or end-stage renal disease.

Medicare has four parts: Part A (Hospital Insurance), Part B (Medical Insurance), Part C Medicare Advantage, and Part D Prescription Drug Coverage.

Medicare Part A

Part A covers inpatient hospital stays and other skilled nursing care services. Part A helps pay for hospice care. Part A also covers some home health care services and most of the country's ambulance services.

Some beneficiaries (those with End-Stage Renal Disease) do not need to enroll for Medicare Part A, as it is automatically included if they are on dialysis or on a transplant list with a Medicare-approved organ procurer organization (OPO).

People working who have paid enough into the system can opt into Part A, even if they do not plan on using it during their working years. They can opt out of Part B and use the money they would have paid for Part B as a down payment for Part A. It usually costs about $600 to opt into Medicare Part A.

Part A does not cover vision, dental care, chiropractic services or prescription drugs. It does require beneficiaries to pay fees for some other services. These include Durable Medical Equipment (DME) such as wheelchairs and crutches, prosthetic devices, and eyeglasses; the DME or eyeglasses may be included in Part B.

Medicare Part B

Part B is also known as medical insurance, but it's not insurance per se. It is a separate payment pathway for services not covered under the more comprehensive Part A but is necessary to keep you healthy.

Part B includes physician services, outpatient care such as X-rays and labs, Outpatient Physical Therapy (PT), anticoagulation drug therapy (blood thinners), ambulance rides and other Part A Long Term Care hospital stays.

Part B does cover non-physician long-term care (LTC) services such as skilled nursing facility care and home health services. It also covers some cancer screening tests and preventive care such as flu shots and immunizations.

Medicare Part B must be bought with Medicare Part A since the combined single premium is cheaper than separately buying the two parts. In most cases, people who buy Part B automatically receive Part A free of charge (except for a small monthly premium). If they don't want to buy Part A, they can opt out of it or 'decline' it. In addition, part B of Medicare never uses copays.

The premium for Part B is deducted from the monthly Social Security check. The premium is deducted automatically for those on Social Security, and they don't have to take any action. In some cases, people who are not on Social Security and who think they will pay more in premiums than they will use in services may decline Part B, paying a higher premium later if they change their minds and want to opt back in.

Medicare Part C

Medicare Advantage was created under the Medicare Modernization Act of 2003 (MMA). It is also known as a Medicare HMO (Health Maintenance Organization) or an MSA (Medicare Specialty Plan). The levels of care vary from plan to plan.

Under Medicare Advantage plans, the government pays a fixed amount for a specific set of services based on the type of Medicare Advantage plan. The beneficiary pays all other costs, such as co-payments for doctor visits and prescription drugs.

Part C plans provide all Part A and B services and may include prescription drug coverage. The plans may have a limited network of providers and hospitals and offer extra benefits that Part B does not, such as dental or vision care.

For an additional premium, Part C plans also provide prescription drug coverage that follows the same model as Medicare Part D. To be eligible for a Medicare Advantage plan; you must be enrolled in Original Medicare Parts A and B. You are not eligible if you are active military or a dependent of an active military person who is still on their parent's plan.

Medicare Part D

Part D was created in 2006 under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). It provides prescription drug coverage to Medicare beneficiaries. The cost varies from plan to plan, with plans offered by private insurers. The government subsidizes the high cost for low-income beneficiaries. Part D plans can provide additional benefits beyond the basic Medicare coverage of Part A and B, such as dental and vision care and life insurance. They may also offer prescription drug coverage that follows the same model as Medicare Part C (see above). There are restrictions on which drugs are covered, however.

You must be enrolled in Original Medicare Parts A and B to qualify for a Part D plan. You may not change to a Part D plan if you are on someone else's plan or have applied for Social Security disability benefits before applying for Medicare. You must be at least 65 years of age to enroll in a Medicare Advantage or prescription drug plan under Part D. A person under age 65 can enroll in a Medicare Part D plan if diagnosed with end-stage renal disease.

A special enrollment period can be used to enroll in a Part D plan after you leave Part A or B coverage. Suppose you have moved out of the U.S. and are not eligible for another U.S. health insurance program. In that case, you may still be eligible for a Medicare-approved international drug plan under Part D outside the U.S. You may enroll if you are no longer covered by your previous health insurance or have become eligible for another health insurance program (such as Medicare Secondary Payer or other Government Healthcare Programs) that covers prescription drugs.