Parts of Medicare
Medicare is organized into four distinct parts. Understanding what each part covers — and what it costs — is the first step toward building the right coverage for your needs.
Understanding the Four Parts
When people say "Medicare," they're actually referring to several different programs grouped under one umbrella. Each part covers different services and has its own costs, rules, and enrollment requirements. Parts A and B together make up "Original Medicare," while Parts C and D are offered through private insurance companies approved by Medicare.
Below, we break down each part in detail so you can understand exactly what's covered, what it costs, and how the parts work together.
Part A — Hospital Insurance
Medicare Part A covers inpatient care when you are admitted to a hospital, skilled nursing facility, or other facility. It is often called "hospital insurance."
What Part A Covers
- Inpatient hospital care — Room, meals, nursing care, medications administered during your stay, and other hospital services.
- Skilled nursing facility (SNF) care — Up to 100 days per benefit period following a qualifying 3-day hospital stay. Days 1–20 are fully covered; days 21–100 require a daily coinsurance.
- Hospice care — Comfort care for terminally ill patients, including medication for symptom management, medical services, and counseling.
- Home health care — Part-time skilled nursing care, physical therapy, and other services if you are homebound and meet certain conditions.
Part A Costs
Most people do not pay a monthly premium for Part A because they (or a spouse) paid Medicare taxes for at least 10 years. However, Part A does have a deductible per benefit period and coinsurance for extended hospital stays and skilled nursing facility care.
Part B — Medical Insurance
Medicare Part B covers medically necessary outpatient services and preventive care. It works alongside Part A to form Original Medicare.
What Part B Covers
- Doctor and specialist visits — Office visits, consultations, and second opinions.
- Outpatient care — Surgeries, treatments, and procedures performed without an overnight hospital admission.
- Preventive services — Annual wellness visits, flu shots, mammograms, colonoscopies, cardiovascular screenings, and diabetes screenings at no cost to you.
- Lab tests and diagnostic imaging — Blood work, X-rays, MRIs, CT scans, and other tests.
- Durable medical equipment (DME) — Wheelchairs, walkers, hospital beds, oxygen equipment, and other medically necessary items.
- Mental health services — Outpatient therapy, psychiatric consultations, and partial hospitalization.
- Ambulance services — When other transportation would endanger your health.
Part B Costs
Part B requires a monthly premium. The standard premium is set annually by CMS and may be higher if your income exceeds certain thresholds (known as IRMAA — Income-Related Monthly Adjustment Amount). Part B also has an annual deductible, after which Medicare typically covers 80% of approved charges, leaving you responsible for the remaining 20% coinsurance.
Part C — Medicare Advantage
Medicare Part C, commonly called Medicare Advantage, is an alternative way to receive your Medicare benefits. These plans are offered by private insurance companies approved by Medicare and must cover everything Original Medicare covers.
What Part C Covers
- Everything in Parts A and B — All medically necessary hospital and medical services.
- Prescription drugs (usually) — Most Medicare Advantage plans include Part D drug coverage.
- Extra benefits — Many plans add dental, vision, hearing, fitness memberships (like SilverSneakers), over-the-counter allowances, transportation to medical appointments, and telehealth services.
Part C Costs
You must continue to pay your Part B premium. Many Medicare Advantage plans charge $0 in additional monthly premiums. Plans use copays, coinsurance, and deductibles for services, and all plans include an annual out-of-pocket maximum — a protection that Original Medicare does not offer.
Plan Types
Medicare Advantage plans come in several network types, including HMO (Health Maintenance Organization), PPO (Preferred Provider Organization), PFFS (Private Fee-for-Service), and SNP (Special Needs Plans). Each type has different rules about using in-network versus out-of-network providers.
Part D — Prescription Drug Coverage
Medicare Part D provides coverage for prescription medications. Part D plans are offered by private insurance companies approved by Medicare and are available as standalone plans (for people on Original Medicare) or bundled into Medicare Advantage plans.
How Part D Works
- Formulary — Each plan has a list of covered drugs organized into tiers. Lower tiers (generics) typically have lower costs, while higher tiers (brand-name and specialty drugs) cost more.
- Pharmacy networks — Plans have preferred pharmacies where you may pay lower copays. Most plans also offer mail-order pharmacy options for maintenance medications.
- Coverage stages — Part D coverage moves through annual stages: deductible phase, initial coverage phase, coverage gap (the "donut hole"), and catastrophic coverage.
Part D Costs
Part D plans charge a monthly premium that varies by plan. Like Part B, higher-income beneficiaries may pay an additional IRMAA surcharge. You'll also pay copays or coinsurance for each prescription, and costs vary by coverage stage and drug tier.
Late Enrollment Penalty
If you go without creditable prescription drug coverage for 63 continuous days or more after your Initial Enrollment Period ends, you may face a permanent late enrollment penalty added to your Part D premium. This makes it important to enroll in Part D when you are first eligible, even if you do not currently take many medications.
How the Parts Work Together
When building your Medicare coverage, you have two main paths:
Path 1: Original Medicare + Supplements
Enroll in Part A + Part B (Original Medicare), add a Medicare Supplement (Medigap) plan to cover deductibles and coinsurance, and add a standalone Part D plan for prescription drug coverage.
Path 2: Medicare Advantage (All-in-One)
Enroll in a Medicare Advantage (Part C) plan that bundles Part A, Part B, and typically Part D into one plan. You may also receive extra benefits not available through Original Medicare.
Each path has its own advantages and trade-offs. Our agents can help you compare both options based on your doctors, medications, budget, and health care preferences.
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