The Four Parts of Medicare and What Each One Covers
Medicare has four separate parts, and each one covers different things. Part A covers hospital stays, skilled nursing care, and hospice. Part B covers doctor visits, outpatient care, and medical equipment. Part D covers prescription drugs. Part C, also called Medicare Advantage, is an alternative to Parts A and B offered by private insurance companies — it bundles hospital and doctor coverage together and usually includes prescription drug coverage and dental or vision benefits.
Most people think of Medicare as one program, but it works more like a toolkit. You choose which parts you need, and the coverage rules are different for each one. Understanding what each part actually pays for — and what it does not — helps you figure out what gaps you might have and whether you need additional coverage.
Key Takeaways
- Part A covers hospital stays and skilled nursing facilities; Part B covers doctor visits and outpatient services; Part D covers prescription drugs; Part C bundles A and B through a private insurer and usually adds drug coverage.
- Medicare does not cover dental, vision, hearing aids, or long-term custodial care, and you pay a percentage of costs even after Medicare pays its share.
- You pay monthly premiums for Part B and Part D, and you pay deductibles and copayments when you use services.
- If you do not enroll in Part B or Part D when you first become may be able to access, you may face permanent late-enrollment penalties.
- Medigap policies and Medicare Advantage plans are two different ways to cover the gaps that original Medicare leaves behind.
Part A: Hospital, Skilled Nursing, and Hospice Coverage
Part A covers inpatient hospital stays, care in a skilled nursing facility 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 did not work long enough, you can purchase Part A coverage, but the monthly cost varies.
When you use Part A, you pay a deductible for each hospital stay — this is a flat amount you pay before Medicare starts paying. After you meet the deductible, Medicare covers all costs for the first 60 days of a hospital stay. From day 61 to day 90, you pay a daily copayment. Beyond 90 days, you have access to "lifetime reserve days" that you can use, but you pay a higher daily copayment for those. For skilled nursing facilities, you pay nothing for the first 20 days after a hospital stay, then a daily copayment from day 21 to day 100.
Part A does not cover custodial care — help with bathing, dressing, or daily living — unless it is part of skilled nursing care you are receiving for a medical reason. It also does not cover private-duty nursing or most long-term care.
Part B: Doctor Visits, Outpatient Care, and Medical Equipment
Part B covers doctor visits, preventive care, outpatient hospital services, physical therapy, mental health services, and durable medical equipment like wheelchairs or oxygen. You pay a monthly premium for Part B, and the amount changes each year. You also pay an annual deductible before Part B starts paying, and after that you typically pay 20 percent of the cost of services while Medicare pays 80 percent.
Part B covers preventive services with no copayment — things like annual wellness visits, cancer screenings, and vaccinations. For other services, the 20 percent you pay can add up quickly if you need ongoing care. Some doctors and suppliers accept Medicare's approved amount as full payment, but others may charge more, and you would owe the difference.
Part B does not cover routine dental work, eye exams for glasses or contacts, hearing aids, or most routine foot care. It also does not cover cosmetic surgery or most prescription drugs — those are covered under Part D instead.
Part D: Prescription Drug Coverage
Part D is prescription drug coverage offered by private insurance companies approved by Medicare. You choose a plan during your enrollment period, and each plan has its own list of covered drugs, monthly premium, and cost structure. You pay a monthly premium for Part D, and you also pay out-of-pocket costs when you fill prescriptions.
Most Part D plans have a deductible, then a period where you pay a copayment or coinsurance for each drug. After you and your plan spend a certain amount on drugs, you enter the "coverage gap" — sometimes called the "donut hole" — where you pay a higher percentage of the cost. Once your out-of-pocket spending reaches a yearly limit, catastrophic coverage kicks in and you pay a small copayment for the rest of the year.
If you do not enroll in Part D when you first become may be able to access, you may face a permanent penalty added to your premium if you join later. The penalty amount depends on how long you went without coverage.
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 original Medicare. Most Medicare Advantage plans also include Part D prescription drug coverage, and many add benefits that original Medicare does not cover — dental, vision, hearing aids, or fitness programs.
The trade-off is that Medicare Advantage plans usually have networks. You must use doctors and hospitals in the plan's network, except in emergencies. You also typically pay lower monthly premiums and lower deductibles than original Medicare, but you may pay more out-of-pocket when you use services. Plans vary widely, so comparing the specific costs and coverage of plans available in your area is essential.
You can switch between original Medicare and Medicare Advantage during the annual enrollment period, which runs from October 15 to December 7 each year. If you switch to original Medicare from Medicare Advantage, you may want to buy a Medigap policy to cover the gaps that original Medicare leaves.
What Medicare Does Not Cover
Medicare does not cover dental work, routine eye exams, glasses or contacts, or hearing aids. It does not cover long-term custodial care in a nursing home or assisted living facility. It does not cover most routine foot care, acupuncture, or most alternative treatments. It also does not cover private-duty nursing or care that is not medically necessary.
Many people buy a Medigap policy — supplemental insurance sold by private companies — to cover some of these gaps. Medigap policies pay some or all of the deductibles, copayments, and coinsurance that original Medicare leaves you responsible for. Alternatively, if you choose a Medicare Advantage plan, you may get some of these benefits built in, though the coverage and costs vary by plan.
How Much You Pay: Premiums, Deductibles, and Copayments
Medicare costs come in three forms. Premiums are monthly payments you make to have coverage — you pay a premium for Part B and Part D, and you may pay a premium for Part A if you did not work long enough. Deductibles are amounts you pay before Medicare starts paying — Part A and Part B each have an annual deductible. Copayments and coinsurance are amounts you pay each time you use a service — for example, 20 percent of the cost of a doctor visit under Part B.
The exact amounts change each year. Your Part B premium and deductible depend on your income — higher earners pay more. Your Part D costs depend on which plan you choose. If you have limited income, you may be able to get help paying premiums and out-of-pocket costs through programs like the Low-Income Subsidy or Extra Help.
Frequently Asked Questions
Do I have to take all four parts of Medicare?
No. Part A is automatic if you are 65 and a U.S. citizen or permanent resident. You choose whether to enroll in Part B and Part D. If you choose Part C instead of original Medicare, you get Parts A and B bundled together through a private plan, and you usually get Part D included. You do not have to take any of them, but delaying Part B or Part D can result in permanent penalties.
What happens if I do not enroll in Part B or Part D when I turn 65?
If you do not enroll in Part B during your initial enrollment period and you do not have other may have access to coverage, you will pay a permanent penalty on top of your regular premium for as long as you have Medicare. The same applies to Part D. The penalty is calculated based on how many months you went without coverage.
Can I switch from Medicare Advantage back to original Medicare?
Yes, during the annual enrollment period from October 15 to December 7. If you switch, you can buy a Medigap policy to cover the gaps that original Medicare leaves. You have a limited time window to buy Medigap without medical underwriting, so act quickly if you decide to switch.
Does Medicare cover nursing home care?
Medicare covers skilled nursing facility care for a limited time after a hospital stay — up to 100 days per benefit period. It does not cover long-term custodial care in a nursing home or assisted living. Long-term care is usually paid for out of pocket, through Medicaid if you may have access to, or through long-term care insurance if you have it.
What is the difference between Medigap and Medicare Advantage?
Medigap is supplemental insurance you buy to cover gaps in original Medicare — deductibles, copayments, and some services Medicare does not cover. Medicare Advantage is an alternative to original Medicare offered by private insurers; it bundles Parts A and B and usually includes Part D and extra benefits like dental. Medigap works alongside original Medicare; Medicare Advantage replaces it.