Medicare has four parts, and most people need more than one

Medicare is divided into Part A, Part B, Part C, and Part D. Each part covers different services. Part A covers hospital care. Part B covers doctor visits and outpatient services. Part C is an alternative way to get Parts A and B through a private insurance company. Part D covers prescription drugs. Most people who have Medicare use at least Parts A and B, and many also need Part D for medications.

You do not automatically get all four parts. When you turn 65, you are offered Part A and Part B during your initial enrollment period. Part D is separate and requires you to choose a plan. Part C is optional and replaces Part A and B if you pick it. Understanding what each part does helps you decide which ones you need and when to sign up.

Key Takeaways

  • Part A covers hospital stays, skilled nursing care, and some home health services, and most people do not pay a monthly premium for it.
  • Part B covers doctor visits, lab tests, imaging, and outpatient procedures, and requires a monthly premium that increases if you delay signing up.
  • Part D covers prescription medications and must be chosen separately during your enrollment period or you may face a permanent penalty.
  • Part C lets you get your hospital and doctor coverage through a private insurance plan instead of Original Medicare, often with lower out-of-pocket costs but a smaller network of doctors.

Part A: Hospital and skilled nursing care

Part A covers inpatient hospital stays, including your room, meals, and standard nursing care. It also covers skilled nursing facility care after a hospital stay — for example, rehabilitation in a nursing home if you need physical therapy. Part A covers some home health services when ordered by your doctor, and it covers hospice care for people with terminal illness.

Most people do not pay a monthly premium for Part A because they or their spouse paid Medicare taxes while working. However, Part A does have a deductible and copayments. In 2024, the hospital deductible is $1,632 per stay. After you meet the deductible, Medicare covers all costs for the first 60 days. Days 61 through 90 require a daily copayment. Skilled nursing care has its own rules: Medicare covers the first 20 days fully, then charges a daily copayment for days 21 through 100.

You are automatically enrolled in Part A when you turn 65 if you are a U.S. citizen or permanent resident who has lived in the country for at least five years. You do not need to do anything to get it.

Part B: Doctor visits and outpatient services

Part B covers visits to your doctor, specialist appointments, lab tests, X-rays, and outpatient procedures. It also covers preventive services like annual wellness visits, cancer screenings, and vaccinations. Part B pays for durable medical equipment like wheelchairs and oxygen, and it covers mental health services and physical therapy.

Part B requires a monthly premium. In 2024, the standard premium is $164.90 per month, but the amount changes each year and may be higher if your income is above a certain threshold. You also pay a yearly deductible — $240 in 2024 — and then a 20% copayment for most services after that. Some preventive services have no copayment.

You must actively choose Part B during your initial enrollment period, which begins three months before the month you turn 65 and ends three months after. If you delay signing up and do not have other health coverage, you will pay a permanent 10% increase to your Part B premium for each year you were late. This penalty stays with you for life, so it is important to enroll on time even if you do not plan to use it right away.

Part D: Prescription drug coverage

Part D covers prescription medications. It is run by private insurance companies approved by Medicare, and you choose which plan to use. Plans vary in which drugs they cover, how much you pay, and which pharmacies you can use. Some plans have no monthly premium but higher copayments; others charge more per month but less per prescription.

You must choose a Part D plan during your initial enrollment period or during the annual open enrollment period in October and November. If you go without Part D coverage and do not have other drug coverage, you will pay a permanent penalty of about 1% of the national average drug plan premium for each month you were not covered. Like the Part B penalty, this increases your costs for life.

Part D coverage has a standard structure: you pay a monthly premium, then a deductible (up to $545 in 2024), then a copayment or coinsurance for each drug until you reach a certain spending threshold. After that, you enter the "donut hole," where you pay more out of pocket. Once your total out-of-pocket spending reaches a limit (about $7,050 in 2024), Medicare pays most of the cost for the rest of the year.

Part C: An alternative to Original Medicare

Part C, also called Medicare Advantage, is a way to get your Part A and Part B coverage through a private insurance company instead of through Original Medicare. The private plan must cover everything Original Medicare covers, but it can organize the coverage differently. Most Part C plans include Part D drug coverage as well.

Part C plans often have lower monthly premiums and lower out-of-pocket costs than Original Medicare. However, they typically require you to use doctors and hospitals in their network. If you see an out-of-network provider, you may pay more or the plan may not cover the visit at all. Part C plans also usually require referrals to see specialists.

You can switch to Part C during your initial enrollment period or during the annual open enrollment period. If you have Original Medicare and want to switch to Part C, you must drop Part A and Part B first. If you later want to go back to Original Medicare, you can do so during the open enrollment period, though you will need to choose a separate Part D plan if you want drug coverage.

How the parts work together

Most people use Original Medicare, which means they have Part A and Part B. They then add Part D for prescription drugs. This combination covers hospital care, doctor visits, and medications, but leaves some gaps — Original Medicare does not cover dental, vision, hearing aids, or long-term care.

Some people buy a Medigap policy (also called supplemental insurance) to fill those gaps. Medigap is separate from the four Medicare parts and is sold by private insurance companies. It helps pay the deductibles and copayments that Original Medicare requires.

Other people choose Part C instead, which bundles hospital, doctor, and often drug coverage into one plan. Part C does not work with Medigap, so you choose either Original Medicare plus Medigap, or Part C.

When to sign up for each part

Your initial enrollment period is the window when you can sign up without penalties. It runs for seven months: three months before the month you turn 65, the month you turn 65, and three months after. During this time, you can enroll in Part B and Part D without paying a permanent penalty if you delay.

If you miss your initial enrollment period, you can sign up during the general open enrollment period from January 1 to March 31 each year. However, if you sign up late for Part B or Part D, you will owe a permanent penalty. The only exception is if you had other health coverage — such as through an employer — during the time you were not enrolled in Medicare. In that case, you have a special enrollment period to sign up without penalty.

Part A is automatic, so you do not need to do anything. Part C has its own enrollment rules: you can switch to or from Part C during the annual open enrollment period, or during a special enrollment period if you move out of your plan's service area.

Frequently Asked Questions

Do I have to take all four parts of Medicare?

No. Part A is automatic. You must actively choose Part B, and if you do not sign up during your initial enrollment period, you will pay a permanent penalty. Part D is optional, but delaying it also results in a permanent penalty. Part C is optional and replaces Part A and B if you choose it.

What happens if I miss my enrollment important date?

If you miss your initial enrollment period for Part B or Part D, you can still sign up during the general open enrollment period from January 1 to March 31. However, you will owe a permanent penalty that increases your monthly costs for life. The only way to avoid the penalty is to show you had other health coverage during the time you were not enrolled.

Can I change which parts I have after I sign up?

Yes, during the annual open enrollment period from October 15 to December 7, you can switch between Original Medicare and Part C, or change your Part D plan. You can also make changes if you move, lose coverage, or experience certain life events. Outside these windows, changes are limited.

Does Part C include drug coverage?

Most Part C plans include Part D drug coverage, but not all. When you compare Part C plans, check whether drug coverage is included and review which medications are covered. Some Part C plans do not include drugs, so you would need to buy Part D separately.

What should I ask my doctor about Medicare parts?

Ask your doctor which specialists you see regularly and whether they accept Medicare. Ask about any medications you take and whether they are typically covered by Part D plans. If you are considering Part C, ask whether your doctor participates in the plans you are looking at, since Part C plans have networks.