Medicare is divided into parts — each covering a different type of care. Most people end up needing more than one part working together, which is exactly where the confusion usually starts. Here's what each part actually covers, what it costs, and how they fit together.
Key Takeaways
- Part A covers hospital care and is premium-free for most people who worked 40+ quarters.
- Part B covers doctor visits and outpatient care — standard premium is $202.90/month in 2026.
- Part C (Medicare Advantage) is a private alternative that bundles A, B, and usually D.
- Part D covers prescription drugs and carries a permanent late enrollment penalty if delayed.
- Original Medicare (A+B) and Medicare Advantage (C) are two different paths — not combined.
Part A: Hospital Insurance
Part A covers inpatient hospital stays, care in a skilled nursing facility (for a limited time after a qualifying hospital stay), hospice care, and some home health care. It does not cover long-term custodial care — see our guide on what Medicare doesn't cover for more on that gap.
Most people pay $0 premium for Part A if they or their spouse worked and paid Medicare taxes for at least 40 quarters (10 years). The Part A deductible is $1,676 per benefit period in 2026 — not per year, but per benefit period, which starts when you're admitted and ends after 60 consecutive days without inpatient care.
Part B: Medical Insurance
Part B covers doctor visits, outpatient care, preventive services (like annual wellness visits and many screenings), and durable medical equipment such as wheelchairs and walkers.
The standard Part B premium is $202.90/month in 2026, with an annual deductible of $283. After you meet the deductible, you typically pay 20% of the Medicare-approved amount for most services — Original Medicare has no annual out-of-pocket maximum, which is one reason many people add a Medigap plan or switch to Medicare Advantage. Higher earners may pay more than the standard premium — see our guide on Medicare costs and IRMAA for the full breakdown.
Part C: Medicare Advantage
Medicare Advantage is a private insurance alternative to Original Medicare. Instead of Medicare paying providers directly, Medicare pays a private insurance company to administer your coverage. Part C plans bundle Part A and Part B together, usually include Part D drug coverage, and often add extra benefits like dental, vision, and hearing that Original Medicare doesn't cover. The tradeoff is that most plans require you to use a network of providers.
| Feature | Original Medicare (A+B) | Medicare Advantage (Part C) |
|---|---|---|
| Provider network | Any provider accepting Medicare, nationwide | Usually a defined network (HMO/PPO) |
| Monthly premium | Part B premium applies | Varies by plan, some as low as $0 |
| Out-of-pocket maximum | None | Required by law, varies by plan |
| Extra benefits (dental, vision, hearing) | Not included | Often included |
| Prior authorization | Rarely required | Often required for certain services |
For a deeper comparison between Medicare Advantage and adding a Medigap supplement to Original Medicare, see Medicare Advantage vs. Medigap: Which Is Right for You?
Part D: Prescription Drug Coverage
Part D is standalone prescription drug coverage for people on Original Medicare (Medicare Advantage plans typically build drug coverage into the plan itself). Premiums, deductibles, and which drugs are covered — the plan's "formulary" — vary significantly by plan and by drug tier.
If you go without Part D or other creditable drug coverage for 63 or more days after you're first eligible, you'll face a permanent late enrollment penalty added to your premium for as long as you have Part D coverage.
How the Parts Work Together
| Combination | What it looks like |
|---|---|
| Part A + Part B only | Original Medicare with no supplemental coverage — highest exposure to out-of-pocket costs |
| Part A + Part B + Part D | Original Medicare plus standalone drug coverage, still no cap on medical out-of-pocket costs |
| Part A + Part B + Medigap + Part D | Original Medicare with a supplement covering most cost-sharing, plus separate drug coverage |
| Part C (Medicare Advantage, usually with D built in) | Private plan replacing Original Medicare, network-based, often with extra benefits |
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