Medicare is the federal medical insurance program for people age 65 or older, and disabled persons of any age receiving Social Security benefits for not less than 24 months.

A recent survey by the American Association of Retired Persons (AARP) revealed that 60% of Medicare beneficiaries believe that Medicare would pay most of their long-term care costs. The program actually pays for only 14% of these costs.

The Medicare program, administered by the Centers for Medicare and Medicaid Services (CMS), consists of two parts, called A and B. The benefits provided through Part A are essentially limited to hospital care and post-hospitalization skilled nursing care, and involve deductibles, coinsurance payments, and benefit limits. Part B provides broader coverage, and in many respects resembles major medical insurance. But it, too, imposes deductibles and coinsurance requirements.

Medicare's Parts A and B divide care into skilled and non-skilled. Medicare covers only services it defines as skilled. Skilled care is that provided by, or under the supervision of, licensed nursing personnel. Non-skilled care, also called custodial care, makes up the vast majority of all long-term care. Medicare does not pay for it.

Medicare Part A is normally free to covered workers who have been employed more than 40 quarters over their lifetime. If a covered worker has accumulated between 30 and 39 quarters, a monthly premium will be charged of $226 in 2007 for Part A. A covered worker who has accumulated less than 30 quarters will pay $410 per month for Part A in 2007.

Medicare Part A also covers care provided through skilled nursing facilities. The full cost of such care is covered for the first 20 days minus a Medicare Part A deductible of $992 in 2007. A daily deductible of $124 in 2007 is applied for care received from the 21st to the 100th day. Coverage ceases after 100 days.

Medicare Part A also Reimburses for Home Care Under Four Conditions:

• The beneficiary must be confined to home (homebound)
• The beneficiary must require skilled nursing care on an intermittent basis, or physical or speech therapy
• A plan for furnishing the home care services must have been established and be periodically reviewed by a physician
• The beneficiary must be under physician's care when receiving these services

Medicare Covers the Following Services to Beneficiaries Meeting These Conditions:

• Part-time or intermittent nursing care provided by, or under the supervision of, a registered professional nurse
• Physical, occupational or speech therapy
• Medical social services under the direction of a physician
• Part-time or intermittent services of a home health aide

Medicare Part B is a voluntary program that Medicare beneficiaries must elect when they become eligible for Part A. Beneficiaries who decline Part B coverage when they first become eligible may enroll later, but at a higher premium, unless the reason for the delay was continued employment. The premiums for Part B coverage are deducted from the beneficiary's monthly Social Security retirement income check. In 2007, the Part B premium (without the penalty for delayed enrollment) is $93.50 per month in 2007, however if income for a single person is above $80,000 or $160,000 for a married couple, then the premiums will be higher. Social Security will use your income from three years ago to determine your monthly part B premium for 2007.

Medicare Part B does not provide for any care in a skilled nursing home. Part B does however, pay 100% for Medicare-approved home health care services for; part-time skilled nursing care, physical therapy, occupational therapy, speech-language therapy, home health aide services, medical social services, durable medical equipment (such as wheelchairs, hospital beds, oxygen, and walkers), medical supplies and other services.

To learn even more about the Medicare program visit www.medicare.gov.