The qualifying age for Medicare health coverage for most Americans is 65 years of age. The Initial Enrollment Period for Medicare actually starts three months before you turn 65, so you can start applying for and setting up your coverage when you're 64 and nine months.

(It is being talked that, as part of various "reform" plans, the eligibility criteria may rise to the age of 67 or 68 in coming years-but it's likely that any such increase will be phased in so that anyone who's already eligible can stay in the system.)

Medicare is made up of four components known as "Parts".

Specifically they are:

Part A (Medical Services Insurance) pays for part of any:

• doctor's services,
• ambulance services,
• outpatient hospital care,
• x-rays and laboratory tests,
• durable medical equipment and supplies,
• some home health care,
• certain preventive care,
• other outpatient services,

Part B (Hospital Insurance) pays for part of any:

• inpatient hospital care
• critical access hospitals
• skilled nursing facility care
• some home health care
• Hospice care
• Other medical services Part B doesn't cover, such as physical and occupational therapy

Taken together, Parts A and B make up "traditional" Medicare coverage. They are flexible, giving you broad choice in the doctors and hospitals you use, but they require you to pay substantial amounts out of your own pocket. Moreover, they operate like an indemnity-style health insurance policy.

Part C- it's also called the Medicare Advantage program-is, essentially, a managed-care option. It restricts the providers and hospitals you can decide on but generally covers all (or nearly all) of the costs. Part C offers myriad sub-categories:

• Medicare Private Fee-for-Service Plans (PFFSPs), sometimes called Point of Service (POS) Plans. In these plans, you may go to any Medicare-approved primary care doctor, specialist or hospital that will accept the terms of the private plan's payment.
• Medicare Preferred Provider Organization (PPO) Plans. In most of these plans, your share of plan costs is lower when you use doctors, specialists and hospitals that are "in network," which implies they contracted to accept the PPO fee schedule in exchange for a higher volume of patients. Using out-of-network providers is allowed though will cost you more out-of-pocket. The PPO option is designed keeping in mind the rural areas-which have been historically underserved by Medicare providers and facilities.
• Medicare Medical Savings Account (MSA) Plans. These plans include a high deductible plan that will not begin to pay benefits until the high annual deductible is met. They also include a medical savings account into which Medicare will deposit money for you to use to pay your health care costs. Medicare MSA Plans do not cover prescription drugs-you have to buy that coverage separately.
• Medicare Health Maintenance Organizations (HMOs). In these plans, you must get your care from primary care doctors, specialists or hospitals on the HMO's list of network providers, except in emergencies.
• Medicare Special Needs Plans (SNPs). These plans generally limit enrollment to people in certain long-term care facilities (like nursing homes); people eligible for both Medicare and Medicaid; or those with certain chronic or disabling conditions.

Part D is the Medicare Outpatient Prescription Drug Coverage. It comes with a number of limitations and qualifications that we'll consider in further sections. It began in 2006, being a fairly new coverage, and is sold through private-sector insurance companies rather than directly by the government.