Medicare Basics: Parts A, B, C and D Explained
Medicare has several parts, each covering different services. This plain-English guide explains what Parts A, B, C and D cover and how they fit together.
The short version
- Part A is hospital insurance and Part B is medical insurance; together they are Original Medicare.
- Part C (Medicare Advantage) is an alternative way to get Medicare benefits through private plans.
- Part D covers prescription drugs and is offered through private plans.
In this guide
Medicare is the federal health insurance program for people 65 and older, as well as some younger people with disabilities or certain conditions. It can seem complicated at first, mainly because it is divided into parts. Once you understand what each part does, the choices become much clearer.
Part A: Hospital insurance
Part A helps cover:
- Inpatient hospital stays
- Care in a skilled nursing facility after a qualifying hospital stay (not long-term custodial care)
- Hospice care
- Some home health care
Most people do not pay a monthly premium for Part A because they or a spouse paid Medicare taxes while working for a certain amount of time. There is a deductible for each benefit period. For 2026, the Part A deductible is $1,736 per benefit period.
Part B: Medical insurance
Part B helps cover:
- Doctor visits and outpatient care
- Preventive services, such as screenings and the yearly wellness visit
- Lab tests and some imaging
- Durable medical equipment, such as walkers and wheelchairs
- Ambulance services
- Some outpatient mental health services
Part B has a monthly premium. For 2026, the standard Part B premium is $202.90 per month and the annual deductible is $283. People with higher incomes pay more. After the deductible, you typically pay 20 percent of the Medicare-approved amount for most services.
Together, Parts A and B are called Original Medicare. With Original Medicare, you can generally see any doctor or hospital in the U.S. that accepts Medicare.
Part C: Medicare Advantage
Medicare Advantage plans are offered by private insurance companies approved by Medicare. They are an alternative way to receive your Part A and Part B benefits. Most plans also include Part D drug coverage, and many offer extra benefits such as routine dental, vision or hearing coverage.
Medicare Advantage plans usually have networks of doctors and hospitals, and some require referrals to see specialists. Costs, networks and benefits vary widely from plan to plan. You still pay your Part B premium, plus any premium the plan charges.
Part D: Prescription drug coverage
Part D helps cover prescription drugs. It is offered through private plans, either as a standalone plan for people with Original Medicare or as part of a Medicare Advantage plan.
Each plan has a list of covered drugs, called a formulary, and its own premiums, deductibles and copays. Beginning in 2025, there is an annual cap on out-of-pocket costs for covered drugs. For 2026, that cap is $2,100.
Medigap: Supplemental insurance
Medigap, also called Medicare Supplement Insurance, is sold by private companies to help pay some costs that Original Medicare does not cover, such as deductibles and the 20 percent coinsurance. Medigap works only with Original Medicare, not with Medicare Advantage.
Two main paths
Most people choose one of these combinations:
- Original Medicare (Parts A and B), often with a Part D plan and sometimes a Medigap policy.
- A Medicare Advantage plan (Part C), which usually includes drug coverage.
Each path has trade-offs related to cost, flexibility in choosing doctors and extra benefits.
Where to get help
- Medicare.gov has a Plan Finder tool to compare plans in your area.
- 1-800-MEDICARE (1-800-633-4227) is available 24 hours a day.
- Your State Health Insurance Assistance Program (SHIP) offers free, unbiased one-on-one counseling.
Medicare costs and rules can change each year, so review official figures annually. Terrameritavi is an independent publication and is not affiliated with Medicare or any government agency.
