Everyone gets part A, part B (which actually covers most other stuff) is currently $96 per month, part C is a rip-off that supposedly covers your deductibles and your 20% co-pay, and part D is the big Bush rip-off that may or may not cover medications (this and part C are from the big insurance companies, so they have all of the usual ways to make sure that they get your money but you don't get whatever you are paying for.) You can opt out of part B, but it is actually a good value for the money. The parts from insurance companies are not even worth the paper they are written on. That is my two cents.

Here's the Wikipedia link. Scroll down to out-of-pocket expense where they discuss costs to consumers.

http://en.wikipedia.org/wiki/Medicare_%28United_States%29

The wikipedia as mentioned by beetlejuice above has an EXCELLENT primer, I would recommend reading it first.

I wish it had been there when I had to figure out a lot of this a couple years back, it has everything there that took me hours and hours of surfing and then piecing together to figure out. I highly recommend you start there.

Once you do that, some tips from me on some of the things confusing you, what I had to learn the hard way, though the wikipedia entry should straighten most of it out for you:

It looks like even if you are over 65, you have to pay for Part B

Everyone pays a montly premium for Part B, medical services. In most cases it is deducted from their Social Security check, so many are probably not aware of it. In most cases, that is $96.40 a month; in the past that's what everyone paid, though in recent years, Congress has tinkered with means testing it upwards, having people with higher incomes pay more.

There is a deductible and there are co-pays.

It is set up like old time fee-for-service insurance, where you are NOT covered for preventive care, only if you are sick; i.e., it does not cover things like check-ups. Most people using it don't realize that about it BECAUSE all the providers have learned to use the claims codes as if the person is presenting with illness. Most older people using it have something wrong with them, anyways, so when they go for a check-up, the doctor just puts down that they came for care for their illness, and it's covered.

Part A...

Yes, Part A is hospitalization costs only, it is free for seniors, no premium, IF THEY PAID INTO THE SYSTEM long enough when they were working Wikipedia has the premiums down there for those that might have not, and they can be quite steep: $423 a month for a individual. There is also a quite steep $1,000 deductible for the first hospitalization, and you read the wikipedia, it does have limits, things can get expensive for those in the hospital a long time and their are lifetime caps.

Supplemental policies vs. Part C

Supplemental Medigap policies are not the same thing as Part C. Supplementals have long been offered to cover those deductibles and co-pays that Medicare has, and perhaps preventive care in some cases.

Part C, on the other hand, was an experiment created by Congress to get insurance companies involved in offering managed care for Medicare users instead of classic fee-for-service Medicare, because the latter is not preventive-care-oriented, and with the latter the continuity of care is up to the user.

After I did some looking into it, I found that contrary to much blog spin, the idea was not just to privatize or to hand out money to insurance companies for campaign donations. Clearly, it was also an experiment to see if managed care could get better outcomes than the mess of outcomes we are getting with traditional Medicare. (See Gatwande's now infamous New Yorker article on the latter.)

When all the providers are in a network and you have a primary care provider like with HMO's and PPO's, theoretically you have a primary care doctor trying to keep you healthy instead of just treating sickness, there wouldn't be so much useless or even harmful usage of testing and treatments, and specialists in the network would naturally share your records and history with the primary care doctor, something that does not happen in traditional Medicare, etc. Many suspect the fee-for-service nature of traditional Medicare is the reason for a lot of the spiral in health care cots with poor outcomes at the same time, because it is consumer driven rather than doctor driven.

The theory was to see if getting seniors who wanted to to agree to go into managed care would provide better outcomes and lower costs. The carrot for them was they would not have those same deductibles and co-pays they would have with traditional Medicare, and wouldn't have to worry about whether something might be considered preventive care, would feel free to go to the doctor to stay healthy, not just if they were sick.

That's because something does have to be done about the spiraling costs, uneven outcomes and even bad outcomes of Medicare fee-for-service, but for Congress to try to alter it, they end up being electrified by voting seniors. So they offered it as an option being run by insurance companies.

Needless to say, Medicare C has not worked out well well as inteneded, because for-profit insurance companies are involved in doing the managed care, just like the once-great idea of HMO's did not work out well at all after a couple of years. It simply introduced all the same problems we have with much of the insurance for the under 65 population, because managed care insurers for profit have perverse incentives. They are just different from the "money-driven medicine" incentives of consumer-drive fee-for-service.

If you go beyond the wikipedia entry to investigate Medicare Part C on the net, you will find there is tons of spin out there on it. The insurance companies offering the plans are arguing they are getting good results, have their own facts and figures, and then there are groups saying they are a big rip off and a pain in the butt with the denials of care, etc., with their own facts and figures.

Oh, I should mention that Medicare Part C has the benefit of being one plan to deal with. Many seniors now have to deal with basically 3 separate policies and coverage and rules: Medicare, then their supplemental policy, and then their Medicare Part D policy for drugs. It gets messy, it's not easy, especially for the very old. Medicare Part C might have appealed to some seniors for that reason, too, just one company and one card and one coverage to deal with for eveything, no arguments about who is responsible fot this or that. The plan pays (or denies you care, if you want to spin it that way) and the plan gets the money that Medicare would have been paying if they weren't (subject to wheeling and dealing, of course.)

I'd like to add to my comments above a general statement that learnin' up on Medicare a bit really helped me cut through the spin on the problems with under 65 insurance, it helped me understand the situation better.

For example: You know all those horror stories about people with a sick kid hitting the $1 million limit on their policy or similar? Well, Medicare has limits, too, check out Part A, you can't be going into the hospital forever and ever and still be fully covered, it's just that we don't hear screaming about it as much because all of the people are over 65 and chances are they die before that. But Medicare for under 65, you'd run into similar limits on coverage for those with rare expensive illnesses and with constant life/death struggles. Another example is dialysis, it's very expensive, and it was controversial enough for Medicare to be covering it that Congress had to do something special to have it covered. When they did so, we got an explosion of dialysis clinics, some with very dubious reputations--the New York Times did a series on that several years back that was very good.

I'm an insurance agent in Arizona (and a news and politics junkie) and I have mixed feelings about Medicare Advantage. Probably 50% of seniors are in these private Medicare plans in Arizona (if you take out seniors with company, military or state retirement health coverage).

Here in Tucson, HMO private Medicare plans were a model of efficiency and customer satisfaction back in the 90's. The plans included drug coverage and had no monthly premium - plus free gym memberships (all of which continue today). Although the plans have changed over the years, with higher co-pays for hospital stays and other services, many seniors here in Tucson have only known their Medicare HMO. These seniors, most with modest incomes, could never afford a Medicare Supplement ($200/month when you're 75+) and a Part D drug plan ($35-$45/month).

Medicare already announced back in March that payments to the private plans will be cut for 2010. Plans had expected an increase of 5% but will get only .5%, and the word is there will be increases in co-payments for 2010 plans. So things should be very interesting in October when seniors find out their Medicare has indeed changed - although Pres. Obama keeps saying they won't see any changes to their benefits.

I have a feeling Obama's advisors do not know the details of Medicare Advantage and how it works, and they do not see what's coming up in October. And you can bet the Republicans are poised to jump on these Medicare changes that will affect 23% of Medicare beneficiaries who are enrolled in these plans across the country. The kff.org web site has a Medicare Advantage tracker that shows that states like California, Florida, Arizona, and Pennsylvania have 25% to 34% of seniors enrolled in these plans. In Oregon it's 40%. Those are big numbers in key states. And after cuts in benefits for 2010, the cuts will keep on coming in 2011 and 2012 as HR 3200 proposed more cuts each year.

Starting in 2005, Republicans overpaid insurance companies for Medicare Advantage in an effort to make the plans more generous than "Original Medicare". Then they introduced "private-fee-for-service" Advantage plans that did not have networks and were attractive to more affluent seniors who are more mobile. It was all a plan to privatize Medicare - and this is my beef with Medicare Advantage. Now the Democrats are in power and they want to kill Medicare Advantage. So when Democrats cut payments to insurance companies, and insurance companies cut benefits and raise co-payments for seniors.....Can you see the trap the Republicans have set? 10 million seniors and are going to be mad as hell that their Medicare is changing.

I'll promote my blog in which I'm tracking news and notes on Medicare. I'm getting ready for October when there should be lots of news and reaction to Medicare Advantage changes. It's www.medicareblog.org

Changing a Medicare Supplement should not result in any gaps in care or payments. All Med Supps are the same - though retirement or union plans may be different than the supplements for individuals. I have met people whose retirement plans (which act as a supplement to Medicare) include $2,000 deductibles - which means they must pay out $2000 for their medical bills and then the plan kicks in. And these plans continue to rise in costs over the years. Individual Med Supps also go up, but a plan F (which can be bought from many companies (like AARP or Mutual of Omaha)provides 100% coverage with Medicare.

I met with a woman last week who is turning 65 in October and she chose a United of Omaha supplement for $90/month. She is an artist and owns a store here in Tucson, and she has not had health insurance since she turned 45 and her rates went sky high. She said she doesn't understand why Medicare just doesn't charge more and provide complete coverage and eliminate the need for Medicare Supplements.

My guess is that the "gaps" in Medicare were a payoff to insurance companies. It meant that they weren't cut out of the senior market completely with the introduction of Medicare in 1965.

Unfortunately,Medicare can be confusing for seniors (and even insurance agents)and they may not understand that Medicare alone, is not adequate coverage. In my line of work it is interesting to see how different people are: some, like the healthy turning-65 artist, thinks $90/month is a small price to pay to get the best coverage. Others think they can't afford the cost. This type of person is a good candidate for a Medicare Advantage (private) plan which has no monthly premium and includes a drug plan. I tell people they can pay in advance with a supplement or pay as they go with an Advantage plan. And actually, Advantage plans aren't bad - except for how they cover cancer. Most Advantage plans pay 80% of chemo therapy and radiation therapy - which is just like having only Medicare. This is the one big "gap" that I see in Advantage plans.

I can't understand why everything has to be so complicated. Imagine a 90 year old trying to figure out what the best coverage is? It's tough enough for a spry 65 year old. I guess that's where a truly national health care system would be much better. I make my living selling insurance, but I still think our system is a total mess. But I also know there is too much money involved the health insurance business to ever get rid of profit-driven health insurance and health care.

PS: If you're looking for a Med Supp, the only difference from company to company is the premium. Med Supps were standardized in the 1990's so every plan F is exactly the same from company to company. You don't even need to buy from a well-known company. Look for the lowest price.

PPS: But then, don't forget to get a Part D drug plan ($35 or more per month). And these plans ARE different company to company. Are your drugs on the company's "formulary"? You might pay a $30 co-pay with one company for your brand drug while another company might charge you $60 - because your drug is a "non-preferred brand" in that company's formulary. Is that ridiculous or what? Insurance agents get $50 to sign someone up for the drug plan and it's hardly worth the time and effort that SHOULD BE put into comparing premiums, prices, and formularies for a client. Don't get me started on how messed up Part D is. Premiums were $15 per month in 2006 and now they are up to $35-$45, and a new report says they'll go up another 20% over the next five years.