Medicare has four parts, and each one covers different services

Medicare is divided into Part A, Part B, Part C, and Part D. Part A covers hospital stays and some skilled nursing 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 over 65 are automatically enrolled in Parts A and B, but you choose whether to add Part D, and Part C is optional.

Understanding what each part covers helps you know what costs you'll face and whether you need additional coverage. The parts work together or separately depending on which ones you have, and your choices affect what you pay out of pocket.

Key Takeaways

  • Part A covers hospital inpatient care, skilled nursing facility stays, hospice, and some home health services after a hospital stay.
  • Part B covers doctor office visits, preventive care, outpatient surgery, lab tests, and medical equipment like wheelchairs and oxygen.
  • Part C (Medicare Advantage) is offered by private insurance companies and bundles Parts A and B together, often with prescription drug coverage included.
  • Part D is prescription drug coverage you add to Original Medicare (Parts A and B) or it may come built into your Part C plan.
  • Most people pay premiums for Part B and Part D, and Part A is usually free if you or your spouse paid Medicare taxes for at least 10 years.

Part A: Hospital and Skilled Nursing Care

Part A covers inpatient hospital stays, meaning you stay overnight in a hospital bed. It pays for your room, meals, nursing care, and most hospital services. If you need to move to a skilled nursing facility after a hospital stay — for example, to recover from surgery or a stroke — Part A covers up to 100 days, though you pay a daily amount after day 20.

Part A also covers hospice care if you have a terminal illness, and home health services if you're homebound and need skilled nursing or therapy. You don't pay a premium for Part A if you or your spouse worked and paid Medicare taxes for at least 10 years. If you haven't, you can still get Part A but will pay a monthly premium.

Part B: Doctor Visits and Outpatient Services

Part B covers services you receive outside a hospital — at a doctor's office, urgent care clinic, or as an outpatient at a hospital. This includes office visits with your primary care doctor or specialists, preventive services like annual wellness visits and cancer screenings, lab tests and X-rays, and physical therapy or occupational therapy.

Part B also covers medical equipment and supplies: wheelchairs, walkers, oxygen equipment, diabetic testing supplies, and hearing aids (as of 2023). You pay a monthly premium for Part B, and the amount increases if you delay signing up after you turn 65. You also pay a yearly deductible and then 20 percent of the cost of most services after that.

Part C: Medicare Advantage Plans from Private Insurers

Part C, also called Medicare Advantage, is an alternative to Original Medicare (Parts A and B). Instead of getting your coverage directly from Medicare, you join a plan run by a private insurance company that has a contract with Medicare. The private plan must cover everything Part A and Part B cover, but it can do so with different rules — for example, requiring you to use doctors in a specific network or requiring referrals to see specialists.

Many Part C plans include Part D (prescription drug coverage) automatically, so you get hospital, doctor, and drug coverage in one plan. Part C plans often have lower or no monthly premiums than Original Medicare, but they typically have higher out-of-pocket costs when you use services. Some plans include dental, vision, or hearing coverage that Original Medicare doesn't offer. You can switch between Original Medicare and Part C during the annual enrollment period, which runs from October 15 to December 7 each year.

Part D: Prescription Drug Coverage

Part D covers the cost of prescription medications. If you have Original Medicare (Parts A and B), you add Part D by choosing a plan from a private insurance company. If you have Part C, prescription drug coverage is usually included, though you should check your specific plan.

Part D plans vary in which drugs they cover and how much you pay. You pay a monthly premium, and then when you fill a prescription, you pay a copay or coinsurance (a percentage of the cost). If your annual drug costs reach a certain amount, you enter a coverage gap where you pay more out of pocket, though this gap has been shrinking in recent years. You can sign up for Part D when you first become may be able to access at 65, and if you delay, you may pay a penalty for as long as you have the coverage.

How the Parts Work Together

If you choose Original Medicare, you have Part A and Part B automatically, and you can add Part D for prescription drugs. You pay separate premiums for Part B and Part D. With this combination, you're responsible for deductibles and coinsurance on most services.

If you choose Part C (Medicare Advantage), you get Parts A and B through that private plan, and prescription drug coverage is often included. You typically pay one monthly premium instead of separate premiums for Part B and Part D. However, your out-of-pocket costs when you use services may be higher, and you may be limited to a specific network of doctors.

Some people also buy a Medigap policy (supplemental insurance) to help pay the deductibles and coinsurance that Original Medicare doesn't cover. Medigap is separate from the four parts and is sold by private insurance companies.

When to Enroll and What Happens If You Miss the important date

You become may be able to access for Medicare at 65. If you're already receiving Social Security, you're enrolled in Parts A and B automatically. If you're not receiving Social Security, you need to sign up yourself during your initial enrollment period, which is the three months before the month you turn 65, the month you turn 65, and the three months after.

If you miss your initial enrollment period for Part B or Part D, you can still sign up later, but you'll pay a higher monthly premium for as long as you have that coverage. The penalty is permanent — it doesn't go away after a few years. You can make changes to your coverage during the annual enrollment period (October 15 to December 7) or during the Medicare Advantage open enrollment period (January 1 to March 31).

Frequently Asked Questions

Do I have to take all four parts of Medicare?

No. Part A and Part B are automatic at 65 if you're receiving Social Security, but you can decline them if you have other coverage. Part D and Part C are optional — you choose whether to add them. However, if you delay Part D and later sign up, you'll pay a penalty.

What's the difference between Original Medicare and Medicare Advantage?

Original Medicare is Parts A and B run directly by the federal government. Medicare Advantage (Part C) is an alternative where a private insurance company provides your Part A and Part B coverage under different rules, often with lower premiums but higher out-of-pocket costs and network restrictions.

Can I have both Original Medicare and Part C at the same time?

No. You choose one or the other. If you have Original Medicare, you can add Part D for drugs. If you have Part C, prescription coverage is usually included. You can switch between them during the annual enrollment period.

What happens if I don't sign up for Part D when I'm first may be able to access?

If you go without Part D coverage for more than 63 days after you're first may be able to access, you'll pay a penalty each month when you do sign up. The penalty is based on how long you went without coverage and stays with you permanently.

Do I need Medigap if I have Original Medicare?

Medigap is optional. It helps pay deductibles and coinsurance that Original Medicare doesn't cover. Whether you need it depends on your budget and how much medical care you expect to use. Part C plans don't work with Medigap.