Medicare Parts A, B, C, D: What Each Covers & Your Choices

Medicare is structured into distinct parts—A, B, C, and D—each covering different health services: Part A covers inpatient hospital and facility care; Part B covers outpatient medical services; Part C (Medicare Advantage) is an alternative from private insurers that combines A and B, often with Part D and extra benefits; and Part D provides prescription drug coverage.

Key Takeaways

• Part A is hospital insurance, covering stays in hospitals, skilled nursing facilities, hospice, and some home health care.
• Part B is medical insurance, covering doctor visits, outpatient care, preventive services, and durable medical equipment.
• Original Medicare includes Parts A and B, but does not cover prescription drugs or offer an out-of-pocket limit.
• Medicare Advantage (Part C) plans combine Parts A and B, often include Part D, and may offer additional benefits through private insurance companies.
• Part D provides prescription drug coverage, either as a stand-alone plan with Original Medicare or often included in Medicare Advantage plans.
• You typically enroll in Medicare during your 7-month Initial Enrollment Period around your 65th birthday.

What is Medicare Part A?

Medicare Part A is your hospital insurance. It helps cover costs if you are admitted to a hospital. This includes semi-private rooms, meals, general nursing, and other hospital services and supplies.

Part A also covers care in a skilled nursing facility after a qualifying hospital stay. It can also help with home health care and hospice care.

Most people pay no monthly premium for Part A. This is because they or their spouse paid Medicare taxes through employment for 10 years or more (40 quarters). If you paid fewer quarters, you might pay a pro-rated premium.

Even with no premium, Part A has costs. For example, the 2026 inpatient hospital deductible is $1,736 per benefit period. A benefit period starts when you are admitted to a hospital or skilled nursing facility and ends after you have been out for 60 days in a row. It is important to understand the difference between being admitted and being under observation in a hospital. Being under observation often means your care falls under Part B, not Part A, which can affect your costs, especially for follow-up skilled nursing care. You can learn more about this at Hospital Observation vs. Admission: Your Nursing Home Bill.

What Does Medicare Part B Cover?

Medicare Part B is your medical insurance. It covers services and supplies needed to diagnose or treat your medical condition. This includes doctor visits, outpatient care, and many preventive services.

Part B helps pay for things like lab tests, X-rays, mental health care, and some durable medical equipment (DME). It also covers many preventive screenings, flu shots, and annual wellness visits at no extra cost to you. These preventive services are important for maintaining your health.

Unlike Part A for most, Part B usually has a monthly premium. The 2026 standard Part B premium is $202.90 per month. Some people with higher incomes pay an extra amount called the Income-Related Monthly Adjustment Amount (IRMAA).

There is also an annual deductible, which is $283 in 2026. After you meet this deductible, Medicare typically pays 80% of the Medicare-approved amount for most covered services. You pay the remaining 20% coinsurance. It is important to note that Original Medicare, which includes Parts A and B, does not have an annual limit on your out-of-pocket costs.

Who Pays More for Part B?

Medicare uses your income from two years prior to determine your Part B premium. If your modified adjusted gross income was above certain thresholds, you pay the Income-Related Monthly Adjustment Amount (IRMAA). This is an extra monthly charge added to your standard Part B premium.

For example, if your modified adjusted gross income in 2024 was over $109,000 for a single person (or $218,000 for those married filing jointly), you would pay a higher Part B premium in 2026. This extra cost can add hundreds of dollars to your monthly premium, depending on your income level. IRMAA thresholds are adjusted annually by Medicare.

Understanding Part A and Part B Coverage

This table shows how Part A covers inpatient costs while Part B covers outpatient and medical services. Together, they form Original Medicare, which is managed by the federal government.

What is Medicare Part C?

Medicare Part C is also known as Medicare Advantage. These are health plans offered by private insurance companies approved by Medicare. Medicare Advantage plans provide all your Part A and Part B benefits.

Most Part C plans also include prescription drug coverage (Part D) and extra benefits. These can include routine dental, vision, or hearing care, which Original Medicare generally does not cover. For a comparison of these benefits, refer to Dental, Vision, and Hearing: Original Medicare vs. Advantage Coverage.

Medicare Advantage plans often have an annual out-of-pocket maximum. This means there is a limit on how much you will pay for covered Part A and Part B services in a year. Once you reach this limit, the plan pays 100% of your covered costs.

These plans typically use networks of doctors, hospitals, and other providers. You might need to choose a primary care doctor within the network or get referrals to see specialists. Plan types like Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs) have different rules for using doctors outside their network. You typically pay your Part B premium to Medicare, and then a separate premium to your Medicare Advantage plan, though some plans have a $0 premium for the plan itself.

How Does Medicare Part D Work?

Medicare Part D provides prescription drug coverage. These plans are offered by private insurance companies approved by Medicare. You can get a stand-alone Part D plan if you have Original Medicare, or drug coverage may be included in a Medicare Advantage plan.

Each Part D plan has a formulary, which is a list of covered drugs. Drugs are usually grouped into different cost tiers. Your costs for prescriptions will include a monthly premium, an annual deductible (which cannot be more than $615 in 2026), and copayments or coinsurance.

In 2026, the annual out-of-pocket cap for Part D is $2,100. This means once your out-of-pocket costs for covered drugs reach $2,100 in a year, your plan pays 100% of covered drugs for the rest of that year. The "donut hole," or coverage gap, has been eliminated, so you move directly from initial coverage to the out-of-pocket cap phase.

If you don't sign up for Part D when first eligible and don't have other creditable drug coverage, you might face a permanent late enrollment penalty. This penalty is 1% of the national base beneficiary premium ($38.99 in 2026) for each full month you could have had Part D but didn't. For example, if you waited 14 months, your penalty would be about $5.50 each month (14% of $38.99, rounded to the nearest $0.10) added to your premium for as long as you have Part D. You can find more information about avoiding these penalties at Medicare Part D: Avoiding Late Enrollment Penalties.

Spreading Out Drug Costs: The Medicare Prescription Payment Plan

All Medicare drug plans must offer the Medicare Prescription Payment Plan. This plan helps you manage high prescription drug costs by spreading them over monthly payments. You can choose to join if you have Medicare drug coverage, regardless of your income.

If you join, you pay $0 at the pharmacy counter when you fill a prescription that would normally have a high out-of-pocket cost. Your plan will then bill you in monthly installments for the remaining months of the calendar year. This plan does not lower your drug costs, but it makes them more predictable and manageable over time.

For example, if you fill a prescription in July that costs you $600 out-of-pocket, you could choose to pay $0 at the pharmacy. Then, from August through December, you would pay $120 each month ($600 divided by 5 months) in addition to your regular premium. This avoids a large one-time payment. A pharmacy or your plan might tell you about this option if one prescription would cost $600 or more out of pocket.

Combining Medicare Parts for Your Coverage

Understanding what each Medicare part covers helps you choose an ideal path. Most people choose one of two main ways to get their Medicare benefits: Original Medicare or Medicare Advantage.

Option 1: Original Medicare (Parts A & B) only.

This is the federal government's program. You can go to any doctor or hospital in the U.S. that accepts Medicare. However, Original Medicare does not cover prescription drugs, and there is no limit on how much you pay out-of-pocket each year. This option works well if you have comprehensive drug coverage from another source, like a former employer or VA benefits.

Option 2: Original Medicare (Parts A & B) with a stand-alone Part D plan and often a Medigap policy.

Many people add a Medicare Supplement Insurance (Medigap) policy to Original Medicare. Medigap plans help pay some of the out-of-pocket costs that Original Medicare leaves behind, like deductibles, copayments, and coinsurance. You would also enroll in a separate Part D plan for prescription drug coverage. This combination offers broad access to doctors and predictable costs.

Option 3: Medicare Advantage (Part C) plan.

This private plan replaces Original Medicare for your health coverage. It includes your Part A and Part B benefits, and often Part D. These plans often include extra benefits and have an out-of-pocket maximum. However, they may have provider networks and other rules. This option works well for those who prefer an all-in-one plan.

The choice depends on your health needs, financial situation, preferred doctors, and willingness to manage different plans. Each option has its own structure of costs and coverage. You can compare plans in your area based on your specific needs.

When to Sign Up for Medicare

Your first opportunity to enroll in Medicare is usually during your Initial Enrollment Period (IEP). This 7-month period starts 3 months before your 65th birthday month, includes your birthday month, and ends 3 months after your birthday month.

For example, if your birthday is in July, your IEP runs from April 1 through October 31. Enrolling during this time helps you avoid potential late enrollment penalties for Part B and Part D. If you are still working and have employer-sponsored health coverage that is considered creditable, you might be able to delay Part B enrollment without penalty.

If you miss your IEP, you can generally sign up for Part A and Part B during the General Enrollment Period (GEP). The GEP runs from January 1 to March 31 each year. Coverage starts the month after you enroll. However, signing up during the GEP often means you will pay a Part B late enrollment penalty.

The Annual Open Enrollment Period (October 15 – December 7) is for changing Medicare Advantage or Part D plans. The Medicare Advantage Open Enrollment Period (January 1 – March 31) allows those with a Medicare Advantage plan to switch to another Advantage plan or to Original Medicare. In specific situations, you might qualify for a Special Enrollment Period (SEP) to make changes outside of these times.

Have questions? Call 1-877-443-3251 to talk it through with a licensed insurance agent. They're paid by the plans they represent, never by you, and the decision stays yours.

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. Medicare has neither reviewed nor endorsed this information.