Medicare has four separate parts, and most people need more than one
Medicare Part A covers hospital stays, skilled nursing care after a hospital stay, hospice, and some home health services. Part B covers doctor visits, outpatient care, and medical equipment. Part D covers prescription drugs. Part C, also called Medicare Advantage, is an alternative way to get Parts A and B through a private insurance company, usually bundled with Part D.
Most people turning 65 are automatically enrolled in Parts A and B. Part D and Part C are optional but recommended — without Part D, you pay a penalty if you sign up later, and without any coverage gap, your out-of-pocket costs for doctor visits and hospital stays can be very high. This section breaks down what each part actually pays for, what you pay, and how they fit together.
Key Takeaways
- Part A covers hospital and skilled nursing stays; Part B covers doctor visits and outpatient care; Part D covers prescription drugs; Part C is a private alternative to A and B.
- You are automatically enrolled in Parts A and B at 65, but you must actively choose Part D during your initial enrollment window or pay a penalty later.
- Original Medicare (Parts A and B) requires you to pay a deductible and coinsurance, while Medicare Advantage (Part C) typically has lower out-of-pocket costs but limits which doctors you can see.
- Most people need coverage for all four parts — either Original Medicare plus a separate Part D plan, or Medicare Advantage which includes drug coverage.
Part A: Hospital and Skilled Nursing Care
Part A covers inpatient hospital stays, including semi-private rooms, meals, and standard nursing care. It also covers up to 100 days in a skilled nursing facility (a facility providing medical care after a hospital stay, not a long-term care home), home health services ordered by a doctor, and hospice care.
In 2024, you pay a deductible of $1,632 for each hospital stay. After that, Medicare covers all costs for days 1 through 60. Days 61 through 90 require a daily coinsurance payment (currently $408 per day). Days 91 and beyond are covered only if you use your "lifetime reserve days" — a one-time pool of 60 extra days you can use, after which you pay all costs yourself. Most people do not use their lifetime reserve days because few hospital stays last that long.
Home health services are covered at no cost if a doctor orders them and you are homebound. Hospice is covered for people with a terminal diagnosis, and you pay nothing for hospice care itself, though you may pay small copayments for drugs and respite care.
Part B: Doctor Visits and Outpatient Services
Part B covers doctor office visits, preventive care (like annual wellness visits and cancer screenings), outpatient surgery, emergency room visits, lab tests, X-rays, and durable medical equipment like wheelchairs and oxygen. It also covers mental health services, physical therapy, and some home health services.
You pay a monthly premium for Part B (in 2024, the standard premium is $164.90, though higher earners pay more). You also pay an annual deductible (currently $240), and then 20 percent coinsurance on most services after that. For some preventive services like flu shots and colonoscopies, you pay nothing.
Part B does not cover routine dental, vision, or hearing care — those are separate purchases or covered only through a Medicare Advantage plan that includes them. It also does not cover long-term care in a nursing home, custodial care, or most prescription drugs (those are covered by Part D).
Part D: Prescription Drug Coverage
Part D covers most prescription medications, from common drugs like blood pressure medicine to expensive specialty drugs for cancer or rare conditions. You choose a Part D plan from private insurers, and the plan you pick determines which drugs are covered, how much you pay, and which pharmacies you can use.
Each Part D plan has its own monthly premium, annual deductible, and cost-sharing structure. Most plans use a tiered system: you pay less for generic drugs, more for brand-name drugs, and the most for specialty drugs. Once you reach a certain out-of-pocket spending threshold (in 2024, $7,050), you enter the "donut hole" — a gap where you pay a higher percentage of drug costs. After you spend enough to reach catastrophic coverage (in 2024, $10,500 total), Medicare covers most costs.
You must choose a Part D plan during your initial enrollment window (the three months before and after you turn 65). If you do not, and you later sign up, you pay a permanent penalty on top of your premium for every month you were without coverage. The penalty is roughly 1 percent of the national average Part D premium per month of delay.
Part C: Medicare Advantage as an Alternative
Part C, or Medicare Advantage, is a way to get your Part A and Part B coverage through a private insurance company instead of through Original Medicare. Most Medicare Advantage plans also include Part D (drug coverage) and may include dental, vision, or hearing coverage that Original Medicare does not.
The trade-off is that Medicare Advantage plans usually have lower out-of-pocket costs than Original Medicare, but they restrict which doctors and hospitals you can use. Most plans are HMOs or PPOs — HMOs require you to use doctors in their network and usually require a referral to see a specialist, while PPOs let you see any doctor but charge more if you go out of network.
You must have Part A and Part B to join a Medicare Advantage plan. If you switch from Original Medicare to Medicare Advantage, you can usually switch back during the annual open enrollment period (October 15 to December 7), but you cannot switch back to Original Medicare with a Medigap plan (supplemental coverage) without going through underwriting again.
How the Parts Work Together
Most people use either Original Medicare (Parts A and B) plus a separate Part D plan, or Medicare Advantage (Part C with Part D included). Some people with Original Medicare also buy a Medigap policy, which is supplemental insurance that covers some of the costs that Original Medicare does not — like coinsurance, copayments, and the Part B deductible.
The chart below shows the basic structure:
| Coverage Type | Hospital (Part A) | Doctor Visits (Part B) | Drugs (Part D) | Network Restrictions |
|---|---|---|---|---|
| Original Medicare + Part D | Yes | Yes | Separate plan | None — see any doctor |
| Original Medicare + Medigap + Part D | Yes | Yes | Separate plan | None — see any doctor |
| Medicare Advantage (Part C) | Yes | Yes | Usually included | Network doctors only (HMO/PPO) |
If you have Original Medicare and do not choose a Part D plan, you have no drug coverage through Medicare. You can buy Part D later, but you will pay a penalty. If you have Medicare Advantage, drug coverage is usually built in, so you do not face that penalty.
When to Enroll and What Happens If You Miss the Window
You become may be able to access for Medicare at 65. If you are already receiving Social Security, you are automatically enrolled in Parts A and B. If you are not yet receiving Social Security, you must sign up during your initial enrollment window — the three months before your 65th birthday, the month you turn 65, and the three months after.
Part D and Part C enrollment also happens during this window. If you miss it, you can still enroll during the general open enrollment period (October 15 to December 7 each year), but you will pay a penalty for any months you were without coverage. The penalty for missing Part D is permanent — it stays on your premium for as long as you have Medicare.
If you are still working and covered by your employer's health plan, you may be able to delay enrollment without penalty, but you must notify Medicare that you are doing so. The rules are complex, so contact Social Security or Medicare directly if you think this applies to you.
Frequently Asked Questions
Do I have to take all four parts of Medicare?
No. Parts A and B are automatic at 65 (unless you delay). Part D is optional but recommended — without it, you pay a penalty if you sign up later. Part C is optional; it is an alternative to Parts A and B, not an addition to them. Most people end up with coverage for all four parts, either as Original Medicare plus Part D, or as Medicare Advantage.
What is the difference between Original Medicare and Medicare Advantage?
Original Medicare (Parts A and B) lets you see any doctor or hospital, but you pay deductibles and coinsurance. Medicare Advantage (Part C) is run by private insurers, usually costs less out-of-pocket, but restricts which doctors you can see. Medicare Advantage usually includes drug coverage; Original Medicare does not.
Can I switch from Original Medicare to Medicare Advantage later?
Yes, during the annual open enrollment period (October 15 to December 7). If you switch from Medicare Advantage back to Original Medicare, you can do so during open enrollment, but you cannot buy a Medigap policy without underwriting unless you switch within 63 days of losing Medicare Advantage coverage.
What happens if I do not choose a Part D plan?
You have no prescription drug coverage through Medicare. If you sign up for Part D later, you pay a permanent penalty — roughly 1 percent of the national average Part D premium for each month you were without coverage. This penalty stays on your premium for life.
Does Medicare cover dental, vision, or hearing?
Original Medicare does not. Some Medicare Advantage plans include dental, vision, or hearing coverage, but you have to check the specific plan. If you have Original Medicare, you can buy these services separately or through a discount plan.