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Hospital And Medical Insurance Benefits Provided

Excerpted from "Social Security Handbook". See the up-to-date, official Social Security Handbook at

127. Hospital And Medical Insurance Benefits Provided

127.1 What is "Medicare?"

The Health Insurance Program, commonly known as "Medicare," provides comprehensive health insurance protection to the aged, disabled, and those with end-stage kidney disease.

127.2 What are the parts of the Medicare program?

There are four parts to the Medicare program. (See Chapter 24.) Medicare hospital insurance (Part A) helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care, and hospice care. Medicare medical insurance (Part B) helps pay for physician services, outpatient hospital services, outpatient physical therapy, other medical services, and supplies and equipment that are covered by Part A. Medicare Advantage Plans (Part C) are plans offered by private companies that contract with Medicare to provide all Medicare Part A and Part B benefits. Medicare Advantage Plans are HMOs, PPOs, or Private Fee-for-Service Plans. Some plans also offer prescription drug coverage. The Medicare Prescription Drug Benefit (Part D) provides outpatient prescription drug coverage for the aged and disabled.

127.3 Who administers the Medicare program?

The Centers for Medicare & Medicaid Services administers the Medicare program. It sets the standards for hospitals, skilled nursing facilities, home health agencies, hospices, and other providers and suppliers of services in order to receive payment for Medicare-covered services and items. The Centers for Medicare & Medicaid Services sets the standards to be used by Utilization and Quality Peer Review Organizations, intermediaries, and carriers in making payment and coverage decisions for health care furnished to individuals who have hospital and/or medical insurance.

127.4 What role does SSA have in the Medicare program?

We provide beneficiary services for the Medicare program. Social Security offices accept and process applications for enrollment and respond to beneficiary and public inquiries. We also perform some data processing support and premium billing and collection activities.

127.5 How are Medicare premiums paid?

Medicare Part B premiums must be deducted from Social Security benefits if the monthly benefit covers the deduction. If the monthly benefit does not cover the full deduction, the beneficiary will be billed. Beneficiaries may elect deduction of Medicare Part C (Medicare Advantage) from their Social Security benefit. Some Medicare Advantage plans include a reduction in the Part B premium. Social Security will take that reduction into account as soon as we are notified of the reduction by the Centers of Medicare & Medicaid Services. Beneficiaries may also elect deduction of their prescription drug plan premium from their Social Security benefit.

For more information about Medicare premiums go to Medicare & You 2007 at:

Last Revised: May 22, 2007

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