Until the early sixties, retired Americans were responsible for paying for their own medical care or finding private insurance. As a result, nearly half of all citizens over the age of 65 were without health insurance and many could not afford medical care. In 1965, the Social Security Act was passed and the Medicare program was born. Today, all Americans who are at least 65 years old are eligible for Medicare services. In addition, younger people with specific disabilities are also eligible for Medicare.

Medicare Services

Medicare has undergone a number of changes since it was introduced. Today, Medicare is composed of four programs, called parts, which are designed to work independently or together to provide various levels of coverage to Americans over the age of 65.

Medicare Part A

Medicare Part A, referred to by the Social Security Administration as the Hospital Insurance program, helps to pay for inpatient stays in hospitals, nursing homes or hospice centers. In recent years, it was expanded to cover certain health care services that are provided in your home. Part A is free of charge if you had Medicare tax contributions withheld from your pay throughout your career, or if your spouse did. If you didn't pay enough into the system, you will likely have to pay a monthly premium in order to receive Medicare Part A.

Medicare Part B

Medicare Part B, which the Social Security Administration also refers to as the Medical Insurance program, helps to pay for medical appointments, outpatient services, certain preventive care, durable medical equipment, and some services that Part A doesn't cover. This may include physical or occupational therapy and some in-home health services. Part B is a voluntary program, and the government will charge you a premium each month if you decide to keep it.

Medicare Part C

Medicare Part C, which is also called the Medicare Advantage program, is a privately run program that provides coverage for things that are not covered by Part A or Part B. Plans are available in a variety of service tiers at varying price levels. Medicare Advantage plans may be Managed Care Organizations or Private Fee-for-Service Plans.

Medicare Advantage plans take over the Medicare services that you would ordinarily get from Parts A and B. In most cases, Part D prescription coverage is also taken over by your Medicare Advantage plan. Many Medicare Advantage plans also cover other services like dental, vision, hearing, and wellness programs. Medical Advantage plans often require a higher monthly premium than Part A and Part B coverage, and some of them also require copayments.

Medicare Part D

Medicare Part D is Medicare's outpatient prescription drug plan. If you do not opt to join a Medicare Advantage plan that covers your medications, you can join an approved Part D plan. Part D plans vary from state to state.

Medigap Policies

Even with all the different Medicare parts, Medicare will not cover all your medical expenses. Medigap policies were created to make up the difference between the amount your health care actually costs and the amount Medicare pays for the services you receive. Medigap is private insurance provided through private carriers. If you get one of these policies, you will be responsible for the monthly premium.