Medicare is divided into four parts.
Part A: Covers hospital costs. There is a deductible, ($1100.00) in 2010. The deductible is per benefit period. You can have multiple benefit periods in one year. There is generally no premium associated with Part A, as long as you or your spouse have worked for forty quarters (ten years). There are also copays, $275.00 per day for days 61-90 (2010) and $550.00 for days 91 and beyond (2010). Part A will also cover things like a skilled nursing facility (copays apply).
Part B: Covers medical (physician) services. There is a deductible ($155.00) in 2010. This deductible is per year. There is usually a premium for Part B. It is 110.50 per month for 2010, unless you make more than $80,000.00 for one person, and then the premium goes up. After the deductible, Medicare generally pays 80% of the “approved amount,” and you or your supplement must pay 20%. If the doctor does not accept “assignment”, you or your supplement may be required to pay an additional 15% on top of the 20% you already paid.
Part C – Medicare Advantage – Private health plans with an annual contract with Medicare. Plans cover Parts A and B and sometimes D. Country instead of Original Medicare. These are offered in different forms, such as HMO, where you are limited to network doctors only, PPO, where you can go in or out of the network (for a higher cost), or PFFS (private fee-for-service), where you can see any doctor or hospital that accepts Medicare, as long as you agree to accept it. Acceptance can be on a case-by-case basis.
Part D – Prescription Drug Coverage – Plans are offered by private insurance companies. Medications are divided into “Thirds” and copays vary. There is also a “coverage gap” associated with these plans.
Medigap – Private insurance that pays after Medicare. Plans vary and may cover deductibles and copays, depending on the plan you choose. Medicare Supplements are standardized by the Federal Government. They are lettered A, B, C, D, F, G, K, L, M, and N. Every standardized Medigap policy must offer the same basic benefits no matter which insurance company sells it. Cost is often the only difference between Medigap policies with the same letter sold by different insurance companies.
Medicare Supplement: Same as Medigap. Private insurance that pays after Medicare. Plans vary and may cover deductibles and copays, depending on the plan you choose. Medicare Supplements are standardized by the Federal Government. They are lettered A, B, C, D, F, G, K, L, M, and N. Every standardized Medigap policy must offer the same basic benefits no matter which insurance company sells it. Cost is often the only difference between Medigap policies with the same letter sold by different insurance companies.
As all this can be very confusing, it is best to consult with a professional who specializes in this area.