The Four Parts of Medicare, and What Each One Pays For
Medicare has four separate parts, and each one covers different medical services. Part A covers hospital stays, skilled nursing care, and hospice. Part B covers doctor visits, outpatient care, and medical equipment. 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 have Part A and Part B automatically; Part C and Part D are choices you make during enrollment.
The parts overlap in some ways and leave gaps in others. Understanding what each part pays for — and what it does not — helps you decide which coverage you actually need and what out-of-pocket costs you will face.
Key Takeaways
- Part A covers hospital inpatient care, skilled nursing facilities, and hospice; Part B covers doctor visits and outpatient services; together they are called Original Medicare.
- Part C (Medicare Advantage) is a private insurance alternative that must cover everything Parts A and B cover, but often includes Part D drug coverage and may have lower premiums.
- Part D is prescription drug coverage sold by private insurers and is separate from Parts A, B, and C — you can add it to Original Medicare or get it bundled with Part C.
- You pay premiums, deductibles, and copayments or coinsurance for each part, and the amounts vary depending on which parts you choose.
- Enrollment important date matter: missing them can lock you out of coverage or trigger permanent premium penalties.
Part A: Hospital and Skilled Nursing Care
Part A covers inpatient hospital stays, skilled nursing facility care after a hospital stay, home health services, and hospice care. You do not pay a monthly premium for Part A if you or your spouse paid Medicare taxes for at least 10 years while working. If you do not meet that requirement, you can purchase Part A, but the premium is higher.
When you use Part A, you pay a deductible for each benefit period (the amount changes yearly). After you meet the deductible, Medicare covers all costs for the first 60 days of a hospital stay. Days 61 through 90 require a daily copayment from you. Beyond 90 days, you pay more. For skilled nursing care, Medicare covers the first 20 days fully after a hospital stay, then you pay a daily copayment for days 21 through 100. After day 100, you pay all costs.
Part A does not cover long-term custodial care in a nursing home, assisted living, or care at home if you do not need skilled medical services. It also does not cover private duty nursing or most prescription drugs.
Part B: Doctor Visits and Outpatient Services
Part B covers doctor office visits, preventive care (like screenings and vaccines), outpatient surgery, emergency room visits, lab tests, imaging, and durable medical equipment like wheelchairs or oxygen. You pay a monthly premium for Part B, and the amount depends on your income — higher earners pay more. You also pay an annual deductible, and after you meet it, you typically pay 20 percent of the cost for most services while Medicare pays 80 percent.
Part B covers preventive services at no cost to you, including annual wellness visits, cancer screenings, and flu shots. For other services, the 20 percent copayment applies. Some services, like mental health visits, may have different cost-sharing rules.
Part B does not cover routine dental care, vision exams, hearing aids, or long-term care. It also does not cover most prescription drugs — that is what Part D is for.
Part C: Medicare Advantage as an Alternative to Parts A and B
Part C, also called Medicare Advantage, is a private insurance plan that contracts with Medicare to cover everything Part A and Part B cover. Instead of using Original Medicare (Parts A and B), you enroll in a Part C plan, and that plan becomes your primary coverage for hospital and doctor services.
Part C plans often include prescription drug coverage (Part D) bundled in, and many offer dental, vision, or hearing coverage that Original Medicare does not. Premiums are sometimes lower than Original Medicare, and out-of-pocket costs may be capped. However, Part C plans typically use networks — you may have to use doctors and hospitals in the plan's network, or pay more if you go out of network. Plans also often require referrals to see specialists.
If you choose Part C, you still pay your Part B premium to Medicare, and you pay the Part C plan's premium on top of that. You cannot have both Original Medicare and Part C at the same time. If you later decide to switch back to Original Medicare, you may face a gap in drug coverage unless you enroll in a standalone Part D plan.
Part D: Prescription Drug Coverage
Part D covers prescription medications. If you have Original Medicare (Parts A and B), you can add a standalone Part D plan sold by private insurers. If you have Part C, most plans include drug coverage already, though you can switch to a different Part D plan during open enrollment.
Part D plans vary widely in which drugs they cover, what you pay, and which pharmacies you can use. Each plan has a formulary — a list of covered drugs — and drugs are grouped into tiers with different copayments. A drug on tier 1 might cost $5, while the same drug on tier 3 might cost $50. You pay a monthly premium, an annual deductible (which varies by plan), and then copayments or coinsurance for each prescription.
Part D has a coverage gap sometimes called the "donut hole." Once you and your plan have spent a certain amount on drugs in a year, you enter the gap and pay a higher percentage of drug costs until you reach a catastrophic coverage threshold. After that, Medicare covers most costs. The amounts change yearly.
How Costs Work Across All Four Parts
Each part has its own premium, deductible, and cost-sharing structure. Part A has no premium for most people but has a deductible and copayments. Part B has a monthly premium, an annual deductible, and 20 percent coinsurance. Part C has a premium (sometimes zero) and may have copayments or coinsurance depending on the plan. Part D has a monthly premium, an annual deductible, and copayments or coinsurance that change as you move through coverage tiers and the donut hole.
Your total out-of-pocket costs depend on which parts you choose and how much medical care you use. Original Medicare (Parts A and B) has no annual out-of-pocket maximum, meaning costs can be unlimited. Part C plans must cap your out-of-pocket costs for in-network services, which can protect you from very high bills.
If your income is low, you may be able to get help paying premiums and cost-sharing through programs like Medicaid, the Medicare Savings Program, or the Low-Income Subsidy for Part D. These programs are run by your state, and rules vary.
Enrollment important date and Penalties for Late Enrollment
You become may be able to access for Medicare at 65. If you are still working and covered by your employer's health plan, you can delay Part B without penalty as long as you enroll within eight months of leaving your job or losing coverage. If you do not enroll in Part B when you are first may be able to access and you are not covered by an employer plan, you pay a permanent 10 percent premium increase for each year you delayed.
Part D has a similar rule: if you go without drug coverage for more than 63 days after you first become may be able to access, you pay a permanent penalty on top of your Part D premium. The penalty is calculated based on how long you went without coverage.
You can enroll in or change Medicare coverage during the Initial Enrollment Period (the three months before and after the month you turn 65), during the Annual Enrollment Period (October 15 through December 7 each year), or during special enrollment periods if you have a may have access to life event like losing employer coverage or moving to a new state.
Frequently Asked Questions
Do I have to take all four parts of Medicare?
No. Part A is automatic for most people at 65, but you can refuse it. Part B is optional — you can delay it if you have employer coverage. Part C is an alternative to Parts A and B, not an addition. Part D is optional, but going without it when you are first may be able to access triggers a permanent penalty if you later enroll.
Can I have both Original Medicare and Part C at the same time?
No. Part C is a complete replacement for Parts A and B. You choose one or the other. If you have Part C and want to switch back to Original Medicare, you can do so during the Annual Enrollment Period or if you have a may have access to event.
What happens if I miss the enrollment important date?
Missing the Initial Enrollment Period or Annual Enrollment Period means you cannot enroll until the next Annual Enrollment Period, unless you have a may have access to event like losing employer coverage or moving. Late enrollment in Part B or Part D results in permanent premium penalties.
Does Medicare cover dental, vision, or hearing?
Original Medicare (Parts A and B) does not cover routine dental, vision exams, or hearing aids. Some Part C (Medicare Advantage) plans include these benefits, though coverage and costs vary by plan. You can also purchase standalone dental, vision, or hearing plans.
What is the difference between a copayment and coinsurance?
A copayment is a fixed dollar amount you pay for a service — for example, $25 for a doctor visit. Coinsurance is a percentage of the cost — for example, 20 percent of the bill. Part B typically uses coinsurance; Part C and Part D plans may use either.