Part B helps pay for so-called "medically necessary" services such as doctors' services, outpatient care and some preventive care services. For a list of covered expenses, see pages 18-25 of the Medicare handbook.

As with Part A, Part B has its own separate annual deductible -- $135 for 2008 -- as well as its own co-payment and co-insurance costs. Generally speaking, Medicare will pay about 80 percent of the expenses for Part B-covered services and supplies.

"Medicare is comprehensive, it's guaranteed. But it doesn't cover all of your costs," says Paul Precht, director for policy and communications at the Medicare Rights Center.

"You need to be aware of the fact that you will spend money out-of-pocket either for the cost sharing under Medicare or for the cost of supplemental insurance if you don't have that through an employer or if your income isn't low enough to qualify for additional assistance through Medicaid. And it's important to remember that Medicare doesn't have any annual out-of-pocket limits."

You usually don't pay a monthly premium for Part A coverage if you (or your spouse) paid Medicare taxes while working at least 40 calendar quarters. But if you aren't eligible, you may be able to buy Part A coverage if you meet other conditions.

Those enrolled in Part B have to pay a monthly Part B premium and an annual Part B deductible. Most plan participants will pay the standard monthly premium amount, which is $96.40 in 2008. The monthly premium will be higher for people who earn above certain income thresholds ($82,000 for singles; $164,000 for married folks filing jointly). Financial hardship cases can get this premium covered with governmental help. This premium is deducted from your monthly Social Security payment.

Medicare Part C: Medicare Advantage plans
Formerly known as Medicare+Choice, Medicare Advantage plans are alternatives to the original Medicare plan and are not the same thing as "supplemental insurance" (more about this later). Sometimes called Part C or "MA plans," these plans are run by private companies but are part of the Medicare program.