Medicare Parts A, B, C, and D — What They Actually Cover

Most people know Medicare is health insurance for people 65 and older. But ask them what "Part B" means and eyes start to glaze. The alphabet soup — Parts A, B, C, and D — can feel confusing. It doesn't have to be. Here's what each part actually does, in plain English.

The Big Picture First

Think of Medicare like a building with different rooms. Parts A and B are the foundation — this is "Original Medicare," run directly by the federal government. Part C (Medicare Advantage) is a private alternative that replaces and bundles Parts A and B, often adding extra benefits. Part D covers prescription drugs and can be added to Original Medicare or is often included in Advantage plans.

You need to understand each piece separately before you can decide which combination makes sense for your life.

Medicare Part A: Hospital Insurance

Part A is what most people think of when they picture Medicare. It covers:

• Inpatient hospital stays — This includes a semi-private room, meals, general nursing, and most services during a hospital admission.
• Skilled nursing facility (SNF) care — After a qualifying 3-day hospital stay, Part A covers up to 100 days in a skilled nursing facility per benefit period. Days 1–20 are fully covered; days 21–100 require a daily coinsurance payment.
• Home health care — Medically necessary skilled nursing or therapy services in your home, under certain conditions.
• Hospice care — For people with a terminal illness who choose comfort care over curative treatment.

What Part A does NOT cover: Long-term custodial care (help with daily activities like bathing and dressing), most dental care, eye exams, hearing aids.

Cost: Most people pay no monthly premium for Part A if they or their spouse worked and paid Medicare taxes for at least 10 years (40 quarters). However, there is a deductible per benefit period ($1,676 in 2025) plus coinsurance for extended stays.

Medicare Part B: Medical Insurance

Part B covers the "outpatient" side of healthcare — things that happen outside the hospital:

• Doctor visits — Primary care, specialists, surgeons
• Outpatient services — Lab tests, X-rays, outpatient surgery, chemotherapy
• Preventive care — Annual wellness visits, flu shots, mammograms, colonoscopies, and many other screenings are covered at no cost to you
• Durable medical equipment (DME) — Wheelchairs, walkers, oxygen equipment, blood sugar monitors
• Mental health services — Outpatient therapy and psychiatry
• Some home health and ambulance services

What Part B does NOT cover: Routine dental, vision, and hearing care; prescription drugs (covered under Part D); long-term care; most care outside the U.S.

Cost: Part B has a monthly premium. The standard amount in 2025 is $185.00/month. Higher-income beneficiaries pay more through an adjustment called IRMAA. Part B also has an annual deductible ($257 in 2025), after which Medicare typically pays 80% of approved costs and you pay 20% — with no out-of-pocket maximum under Original Medicare alone.

Medicare Part C: Medicare Advantage

Part C isn't a separate set of benefits — it's an alternative way to receive your Medicare coverage. Instead of the federal government paying your claims directly, you enroll in a private insurance plan (offered by companies like Humana, UnitedHealthcare, Aetna) that has contracted with Medicare to provide at least the same coverage as Parts A and B.

Most Medicare Advantage plans:

• Bundle Parts A and B into one plan
• Often include Part D (prescription drug coverage)
• May add extra benefits Original Medicare doesn't cover: routine dental, vision, hearing, fitness memberships, transportation to appointments, and more
• Use networks — you typically need to see in-network doctors and get referrals to see specialists (HMO model), or have more flexibility with higher costs for out-of-network care (PPO model)
• Have an annual out-of-pocket maximum, which Original Medicare lacks

Medicare Advantage premiums vary widely — some plans charge $0/month beyond your Part B premium, while others charge additional monthly premiums for richer benefits.

Common misconception: Enrolling in a Medicare Advantage plan doesn't mean you've left Medicare. You're still a Medicare beneficiary. The plan just administers your benefits instead of the federal government.

Medicare Part D: Prescription Drug Coverage

Part D is standalone prescription drug coverage for people on Original Medicare. (If you have Medicare Advantage, drug coverage is often included in your plan.)

Key facts about Part D:

• Offered by private insurance companies approved by Medicare
• Each plan has a formulary — a list of covered drugs organized into tiers, with different cost levels
• You pay a monthly premium, annual deductible, and copays or coinsurance
• Catastrophic coverage: In 2025, once your total drug costs reach $2,000 for the year, you pay nothing more for covered drugs — this is a significant improvement from prior years
• There is a late enrollment penalty if you don't sign up when first eligible and don't have other creditable drug coverage

Putting It All Together: How the Parts Combine

Most people end up with one of these combinations:

Option 1: Original Medicare only (Parts A + B). Simple, but no drug coverage and no cap on out-of-pocket costs.

Option 2: Original Medicare + Part D + Medigap (Medicare Supplement). Medigap policies fill in the gaps — the deductibles, coinsurance, and copays Original Medicare leaves behind. This is comprehensive but involves multiple premiums.

Option 3: Medicare Advantage (Part C), often bundled with Part D. One plan, often with extra benefits and an out-of-pocket maximum, but with network restrictions.

The "right" choice depends on your health, your finances, your doctors, and your prescriptions. There's no single answer that fits everyone.

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Have questions? Call 1-877-443-3251 for free, no-obligation help from a licensed agent.

This is an educational website and is not affiliated with or endorsed by Medicare or any government agency. We connect consumers with licensed insurance agents who can help with Medicare enrollment. Not all plans or options are available in all areas. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program (SHIP) to get information on all of your options.