Medicare has four parts, and each one covers different services

Medicare Part A covers hospital stays, skilled nursing care after a hospital stay, hospice care, and some home health services. Medicare Part B covers doctor visits, outpatient care, medical equipment, and preventive services. Medicare Part D covers prescription drugs. Medicare Advantage (Part C) is an alternative to Parts A and B — it is a single plan run by a private insurance company that must cover everything Parts A and B cover, but often adds dental, vision, or hearing benefits.

Most people who turn 65 are automatically enrolled in Part A and Part B. Part D and Part C are choices you make during your enrollment period. Understanding what each part pays for helps you know what to expect when you see a doctor, fill a prescription, or go to the hospital.

Key Takeaways

  • Part A covers hospital and skilled nursing stays; Part B covers doctor visits and outpatient services; Part D covers prescription drugs; and Part C (Advantage) bundles A and B into one private plan.
  • You are automatically enrolled in Part A and Part B at 65 if you are a U.S. citizen or permanent resident who has lived in the country for at least five years.
  • Part D and Part C require you to make an active choice during the enrollment period, and missing the important date can result in a permanent penalty on your premiums.
  • Each part has different out-of-pocket costs — deductibles, copays, and coinsurance — so comparing plans during open enrollment helps you understand what you will pay.
  • If you have other insurance through a current job or a spouse's job, you may not need to enroll in Part B right away, but you should contact Social Security to confirm.

Medicare Part A: Hospital and Skilled Nursing Care

Part A pays for inpatient hospital stays, including room, meals, and hospital-provided medications and medical supplies. It also covers up to 100 days in a skilled nursing facility after a hospital stay of at least three days — but only if you are there for medical reasons, not just for custodial care like help with bathing or dressing. Part A also covers hospice care for people with a terminal illness and some home health services when ordered by a doctor.

Part A has a deductible you pay once per benefit period (the period starts when you enter the hospital and ends 60 days after you leave). After you meet the deductible, Medicare pays all covered hospital costs for the first 60 days. Days 61 through 90 require a daily copay. If you stay longer than 90 days, you can use "lifetime reserve days" — 60 additional days that you can use only once in your lifetime, with a higher daily copay.

Most people do not pay a monthly premium for Part A if they or their spouse paid Medicare taxes while working for at least 10 years. If you do not meet that requirement, you can buy Part A coverage, though the monthly premium varies based on how many years you or your spouse worked and paid taxes.

Medicare Part B: Doctor Visits and Outpatient Services

Part B covers doctor office visits, emergency room visits, outpatient surgery, diagnostic tests like X-rays and blood work, physical therapy, mental health services, and durable medical equipment like wheelchairs and oxygen. It also covers preventive services with no copay — annual wellness visits, cancer screenings, cardiovascular screenings, and vaccinations — when you see an in-network provider.

Part B has a yearly deductible that you pay before Medicare starts to pay its share. After you meet the deductible, you typically pay 20 percent of the Medicare-approved amount for most services, and Medicare pays 80 percent. For some services like office visits, you may pay a fixed copay instead. These costs add up, which is why many people buy a Medigap policy (supplemental insurance) to cover the 20 percent coinsurance and other out-of-pocket costs.

Part B has a monthly premium that is deducted from your Social Security check. The amount depends on your income — higher earners pay more. If you delay enrolling in Part B when you first become may be able to access and do not have other may have access to coverage, you will pay a permanent 10 percent penalty on your premium for each year you were late.

Medicare Part D: Prescription Drug Coverage

Part D covers prescription medications at pharmacies. You choose a Part D plan from private insurance companies during the annual enrollment period. Each plan has a different list of covered drugs (called a formulary), different copays for different drug tiers, and different pharmacies in its network. Some plans cover brand-name drugs more generously; others focus on generic drugs at lower cost.

Part D plans have a yearly deductible, a coverage gap (sometimes called the "donut hole") where you pay more out of pocket, and a catastrophic coverage phase where your costs drop again after you spend enough. The exact structure and costs vary by plan and by year. You can change your Part D plan every year during open enrollment, so it makes sense to review your current medications and compare plans annually to find the lowest-cost option.

If you do not enroll in Part D when you first become may be able to access and you do not have other may have access to drug coverage, you will pay a permanent penalty on your premiums when you do enroll. The penalty is based on how many months you went without coverage.

Medicare Advantage (Part C): An All-in-One Alternative

Medicare Advantage is a private insurance plan that bundles Part A and Part B coverage into a single plan. You do not use the Original Medicare card; instead, you use the Advantage plan's card. The plan must cover everything Part A and Part B cover, but it can organize the coverage differently — for example, it might require you to use doctors in its network, or it might charge different copays than Original Medicare.

Many Advantage plans include Part D (prescription drug coverage) built in, and many also add benefits that Original Medicare does not cover, such as dental, vision, hearing aids, or fitness programs. These extra benefits are a major reason people choose Advantage plans. However, Advantage plans often have narrower networks of doctors and hospitals, higher copays for some services, and prior authorization requirements — meaning the plan must approve a service before you receive it.

Advantage plans have a yearly out-of-pocket maximum, which means once you have paid a certain amount in copays and coinsurance, the plan pays 100 percent of covered services for the rest of the year. Original Medicare does not have an out-of-pocket maximum, which is why many people buy Medigap to limit their costs.

How the Parts Work Together

If you choose Original Medicare (Part A and Part B), you can add Part D for prescriptions and Medigap for extra coverage. If you choose Medicare Advantage (Part C), it replaces Parts A and B, and you cannot use Medigap. You can switch between Original Medicare and Advantage once per year during the annual open enrollment period, which runs from October 15 to December 7.

The combination you choose affects your monthly costs, which doctors you can see, and how much you pay when you need care. There is no single "best" choice — it depends on your health, your medications, which doctors you see, and your budget. Many people find it helpful to review their coverage each year during open enrollment to make sure their plan still fits their needs.

Enrollment Periods and important date

You are automatically enrolled in Part A and Part B at 65 if you are a U.S. citizen or permanent resident who has lived in the country for at least five years and you are receiving Social Security benefits. If you are not yet receiving Social Security, you must contact Social Security to enroll in Part B.

Part D and Part C require you to make an active choice during the Initial Enrollment Period, which is the seven-month window that includes the month you turn 65 and the three months before and after. If you miss this important date and do not have other may have access to drug coverage, you will pay a permanent penalty when you enroll later.

After your Initial Enrollment Period, you can change your Part D or Part C plan during the Annual Enrollment Period (October 15 to December 7 each year). You can also switch from Advantage back to Original Medicare during this window, though switching from Original Medicare to Advantage has different rules depending on whether you have Medigap.

Frequently Asked Questions

Do I have to take all four parts of Medicare?

No. Part A and Part B are automatic at 65, but you can decline Part B if you have other health insurance through a current job. Part D and Part C are choices — you pick one or the other, or neither if you have other drug coverage. However, declining Part D or Part C without may have access to coverage results in a permanent penalty.

What is the difference between Original Medicare and Medicare Advantage?

Original Medicare is run by the federal government and covers services nationwide at any provider who accepts Medicare. Advantage is run by private insurance companies and usually requires you to use in-network doctors. Advantage often costs less upfront but may have higher copays and network limits. Original Medicare has no out-of-pocket maximum, so many people add Medigap.

Can I have both Medigap and Medicare Advantage?

No. Medigap is designed to work with Original Medicare (Parts A and B). If you have Advantage, you cannot use Medigap. Advantage plans include their own out-of-pocket limits, so Medigap would be redundant and is not sold to Advantage members.

What happens if I miss the enrollment important date for Part D?

If you miss your Initial Enrollment Period and do not have other may have access to drug coverage, you will pay a permanent penalty on your Part D premiums for as long as you have Medicare. The penalty is calculated based on the number of months you went without coverage, so enrolling late is more expensive in the long run.

Can I change my mind about which part I choose?

Yes, during the Annual Enrollment Period (October 15 to December 7) you can switch Part D plans or change between Advantage and Original Medicare. If you switch from Advantage to Original Medicare, you have a limited window to buy Medigap without medical underwriting, so timing matters.