There are two military options - you can have the military pay your medical costs at a non-military (public/private) school, after which you owe the military x years of service as a doctor in the military. The other option is to go to the military medical school - you're paid standard officer salary to go to school for the y years it takes, and then owe the military x more years service as a doctor.

If you look at it as "getting paid to go to medical school" + "guaranteed employment for x years following medical school" it looks like a pretty sweet gig.