Medicare Parts A, B, C and D Explained

Part A: hospital insurance

Part A generally covers inpatient hospital stays, care in a skilled nursing facility following a qualifying hospital stay, hospice care, and some home health services. It is often described as 'hospital insurance,' though its scope extends into related institutional and end-of-life care settings.

Many people do not pay a monthly premium for Part A if they or a spouse paid Medicare payroll taxes for a required number of years, though this depends on individual work history. People who do not meet that history may pay a premium. Even without a premium, Part A typically still involves deductibles and coinsurance for actual stays, structured around benefit periods rather than a simple annual deductible.

Part B: medical insurance

Part B generally covers outpatient care: doctor visits, preventive screenings, lab tests, outpatient procedures, durable medical equipment, and some home health services not covered under Part A. It is the part most people interact with routinely.

Part B usually carries a monthly premium for all enrollees, and that premium can be higher for people with higher reported income, based on a CMS-administered income-related adjustment. It also typically involves an annual deductible and ongoing coinsurance for covered services. Because these figures change yearly, check the current premium, deductible and coinsurance structure directly at Medicare.gov.

Delaying Part B enrollment without other qualifying coverage can affect future costs and coverage timing — see When to Enroll in Medicare for how enrollment periods work.

Part C: Medicare Advantage

Part C, commonly called Medicare Advantage, is not a supplement — it is an alternative way to receive your Part A and Part B benefits through a private insurance company under contract with CMS. Plans must cover at least what Original Medicare covers, and most also bundle in prescription drug coverage and sometimes extra benefits like dental, vision or hearing.

Medicare Advantage plans typically use a defined network of providers (such as an HMO or PPO structure), and cost-sharing is organized differently than Original Medicare, often with different copayments per service type and an annual out-of-pocket maximum. Plan designs, networks and extra benefits vary by insurer, location and year, and not every plan is available everywhere — always confirm current plan options and details through Medicare.gov's Plan Finder or directly with the insurer.

Part D: prescription drug coverage

Part D covers outpatient prescription drugs through private plans approved by Medicare. It can be purchased as a stand-alone plan alongside Original Medicare, or it may already be bundled into a Medicare Advantage plan.

Each Part D plan maintains its own list of covered drugs (a formulary) organized into cost tiers, and plans can differ meaningfully in which drugs they cover and at what cost-sharing level. Coverage also moves through phases over the course of a year — often described informally in terms of an initial coverage phase, a coverage gap, and catastrophic coverage — though the mechanics and thresholds of these phases are set and adjusted by CMS and should be checked at Medicare.gov rather than assumed from prior years.

How the parts typically combine

There is no single correct combination. The choice generally comes down to how much a person values provider flexibility and predictable cost-sharing structure (favoring Original Medicare plus Medigap) versus lower ongoing premiums, bundled extra benefits and network-based care coordination (often associated with Medicare Advantage).

• Original Medicare only: Part A plus Part B, often without drug coverage — usually not recommended without adding Part D given prescription costs.
• Original Medicare plus Part D: adds prescription drug coverage on top of Parts A and B.
• Original Medicare plus Part D plus Medigap: adds a supplemental policy to help cover cost-sharing gaps left by Parts A and B.
• Medicare Advantage (Part C), often with drug coverage bundled in: replaces Parts A and B administration with a private plan, typically not combined with a Medigap policy.

Where Medigap fits in

Medigap, or Medicare Supplement Insurance, is a separate category of private policy sold to work alongside Original Medicare — it is not one of the four lettered parts, but it is worth understanding because it interacts directly with Parts A and B. Medigap policies help pay some of the deductibles, copayments and coinsurance that Original Medicare leaves to the beneficiary.

Medigap policies are standardized in most states into lettered plans with defined benefits, though pricing and underwriting rules vary by insurer and state, and enrollment timing matters — protections around guaranteed issue are strongest during a specific window after first enrolling in Part B. Confirm current standardized plan options and state-specific rules through your State Insurance Department or Medicare.gov.