Medicare Parts A, B, C, and D: What Each One Actually Covers

How Medicare Is Structured: Four Parts, One System

Medicare isn't a single insurance plan — it's a federal program divided into four distinct parts, each designed to cover a specific category of healthcare. Understanding what each part does (and doesn't do) is the essential first step before making any enrollment decision.

Here's a quick-reference overview before we dive deep:

Parts A and B together are called Original Medicare. They form the foundation. Parts C and D are optional add-ons — though for most people, skipping them entirely creates real gaps in coverage.

If you're new to all of this, our first-year Medicare guide walks through how these parts work together from day one. For a plain-language glossary of terms you'll encounter as you research, see Key Medicare Terms Every Beneficiary Should Know.

Medicare Part A: Hospital and Inpatient Coverage

Part A is often called hospital insurance, and that label is mostly accurate — but it covers more than just overnight hospital stays. Think of Part A as the safety net for the most intensive, costly forms of medical care.

What Part A Covers

• Inpatient hospital care: Semi-private room, meals, nursing services, and most medications administered during your stay.
• Skilled nursing facility (SNF) care: Short-term rehabilitation after a qualifying hospital stay of at least 3 days — not long-term custodial care.
• Hospice care: Comfort-focused care for those with a terminal illness and a life expectancy of 6 months or less.
• Home health services: Part-time skilled nursing or therapy ordered by a doctor — only if you're homebound.

What Part A Does NOT Cover

• Long-term nursing home care (custodial care)
• Physician fees during a hospital stay (that falls under Part B)
• Private-duty nursing or a private hospital room (unless medically necessary)

Part A Costs

Most people pay $0 in monthly premiums for Part A — provided they or their spouse worked and paid Medicare taxes for at least 40 quarters (about 10 years). If you don't meet that threshold, you can pay a premium to enroll.

However, Part A is not free when you use it. There's a per-benefit-period deductible (not an annual one), and after 60 days of a hospital stay, daily coinsurance kicks in. For a full breakdown of what you'll owe, see our Medicare costs quick-reference guide.

Medicare Part B: Outpatient and Preventive Care

If Part A handles the big hospital events, Part B handles everything else that happens outside the hospital walls — which, for most people, is the bulk of their actual healthcare.

What Part B Covers

• Doctor visits: Primary care, specialists, and second opinions.
• Outpatient procedures: Surgeries and treatments done without an overnight hospital stay.
• Preventive services: Annual wellness visits, cancer screenings, flu shots, diabetes screenings, and more — often at no cost to you.
• Durable medical equipment (DME): Wheelchairs, walkers, blood glucose monitors, and CPAP machines prescribed by a doctor.
• Mental health services: Outpatient therapy and counseling.
• Lab tests and diagnostic imaging: Blood work, X-rays, and MRIs ordered by your doctor.
• Ambulance services: When medically necessary.

What Part B Does NOT Cover

• Most prescription drugs (that's Part D's job)
• Routine dental, vision, and hearing care
• Cosmetic procedures
• Acupuncture (with limited exceptions)

Part B Costs

Unlike Part A, Part B comes with a standard monthly premium for nearly everyone. In 2024, that's $174.70 per month for most beneficiaries. Higher earners pay more through an Income-Related Monthly Adjustment Amount (IRMAA). There's also an annual deductible, after which Medicare covers 80% of approved costs — leaving you responsible for the remaining 20% with no out-of-pocket maximum.

That 20% coinsurance with no cap is why many beneficiaries add a Medigap (Medicare Supplement) policy on top of Original Medicare. See how Parts A and B differ — and why most people need both for a side-by-side comparison.

Medicare Part C: Medicare Advantage Plans

Part C — marketed as Medicare Advantage — is an alternative way to receive your Medicare benefits. Instead of getting Parts A and B directly from the federal government, you enroll in a private insurance plan that has been approved and paid by Medicare to provide at least the same level of coverage.

This distinction matters: you're still in Medicare. You haven't left the program. You've just chosen a private vehicle to deliver your benefits.

What Medicare Advantage Plans Must Cover

Every Medicare Advantage plan is legally required to cover everything Original Medicare covers — meaning Parts A and B services. Beyond that, most plans voluntarily add benefits such as:

• Routine dental care (cleanings, X-rays, fillings)
• Vision coverage (eye exams, glasses)
• Hearing aids
• Fitness memberships (e.g., SilverSneakers)
• Transportation to medical appointments
• Over-the-counter allowances

Part C Plan Types

HMO (Health Maintenance Organization)

You must use in-network providers and get referrals to see specialists. Lower premiums but less flexibility.

PPO (Preferred Provider Organization)

You can see out-of-network providers at higher cost. More flexibility, typically higher premiums.

PFFS (Private Fee-for-Service)

The plan sets its own payment rates; providers must agree to treat you before each visit.

SNP (Special Needs Plan)

Tailored for people with specific chronic conditions, dual Medicare-Medicaid eligibility, or institutional care needs.

Part C Costs

Many Medicare Advantage plans advertise $0 monthly premiums — but you still pay your Part B premium. Plans make money through the payments Medicare sends them per enrollee. Be sure to evaluate the plan's deductibles, copays, and out-of-pocket maximum, not just the premium headline.

One important advantage: Medicare Advantage plans must cap your annual out-of-pocket costs, something Original Medicare alone does not do.

Trying to decide between sticking with Original Medicare or switching to Advantage? Our comparison guide Original Medicare vs. Medicare Advantage walks through every major trade-off.

Medicare Part D: Prescription Drug Coverage

Part D was added to Medicare in 2006 to address what was then a glaring gap: the program covered hospital care and doctor visits, but left beneficiaries paying full price for the medications that managed their chronic conditions day to day.

How Part D Works

Part D plans are offered by private insurers, and each plan maintains a formulary — a list of covered drugs organized into tiers. Lower tiers (usually generics) carry lower cost-sharing; higher tiers (brand-name or specialty drugs) carry higher costs.

• Tier 1: Preferred generics — lowest copay
• Tier 2: Generics — low copay
• Tier 3: Preferred brand-name drugs — moderate copay
• Tier 4: Non-preferred brands — higher copay
• Tier 5: Specialty drugs — highest cost-sharing

The Part D Deductible and Out-of-Pocket Cap

Most Part D plans have an annual deductible (up to the maximum set by Medicare each year). After the deductible, you pay your share until you hit the annual out-of-pocket cap — a significant protection added by the Inflation Reduction Act. Starting in 2025, Part D out-of-pocket costs for covered drugs are capped at $2,000 per year.

Who Needs Part D?

If you take any regular prescription medications, enrolling in Part D when you first become eligible is strongly advisable. Delaying enrollment without creditable drug coverage from another source triggers a late enrollment penalty — a permanent increase in your monthly premium of 1% per month for every month you went without coverage.

Part D and Medicare Advantage

Many Medicare Advantage (Part C) plans include prescription drug coverage — these are called MA-PD plans. If your Part C plan includes drug coverage, you generally cannot also enroll in a standalone Part D plan. If your Part C plan does not include drug coverage, you can add a standalone Part D plan.

How the Four Parts Fit Together

Most Medicare beneficiaries don't use all four parts independently — they combine them in one of two main ways:

Path 1: Original Medicare + Part D (+ Optional Medigap)

1. Enroll in Part A and Part B (Original Medicare)
2. Add a standalone Part D plan for prescriptions
3. Optionally purchase a Medigap (Medicare Supplement) policy to cover the 20% coinsurance and other cost-sharing gaps that Original Medicare leaves behind

Path 2: Medicare Advantage (Part C)

1. Enroll in Part A and Part B — this is required before you can join Part C
2. Choose a Medicare Advantage plan that bundles A and B benefits (and often Part D) through a private insurer
3. If your Advantage plan doesn't include drug coverage, add a standalone Part D plan

“Medicare is not one thing. It's a layered system, and the people who struggle most are the ones who treat enrollment as a single checkbox rather than a set of deliberate decisions made in sequence.”

— Juliette Cubanski, Deputy Director of the Program on Medicare Policy, KFF

The right path depends on factors like your health needs, budget, preferred doctors, and whether you travel frequently. Our guide to how the four Medicare parts work together as a complete system explains the interactions in detail — especially the rules that govern which parts you can and can't combine.

What Medicare Doesn't Cover

For all its breadth, Medicare has well-documented gaps. Knowing what's excluded is just as important as knowing what's included — these gaps are where many beneficiaries face unexpected expenses.

Common Coverage Gaps Across All Four Parts

• Routine dental care: Cleanings, fillings, crowns, dentures — none of this is covered under Original Medicare (Parts A and B). Some Medicare Advantage plans include limited dental.
• Routine vision: Eye exams for glasses or contacts are excluded. Medically necessary eye care (such as treatment for macular degeneration) may be covered under Part B.
• Hearing aids: Medicare doesn't cover hearing aids or routine hearing exams. Some Advantage plans do.
• Long-term custodial care: If you need help with daily activities (bathing, dressing, eating) in a nursing home, Medicare does not pay for it. Medicaid or a separate long-term care policy would be needed.
• Most dental implants and orthodontia
• Cosmetic surgery
• Most care received outside the U.S.

For a comprehensive look at these exclusions, see What Medicare Doesn't Cover: Gaps Across All Four Parts. Understanding these gaps upfront helps you plan supplemental coverage before you actually need it.

Choosing the Right Coverage Combination

Now that you understand what each part covers, here's how to think through the decision practically.

Step 1: Enroll in Parts A and B

For most people turning 65, this is automatic if you're already collecting Social Security. If not, you must actively enroll through the Social Security Administration. Parts A and B form the unavoidable foundation.

Step 2: Decide Between Original Medicare and Medicare Advantage

Ask yourself:

• Do my current doctors accept Medicare Advantage networks in my area?
• Do I travel frequently or split time between states? (Original Medicare offers broader provider flexibility.)
• Do I want extra benefits like dental and vision bundled in?
• Am I comfortable with referral requirements to see specialists?

If flexibility and provider choice matter most, Original Medicare may suit you better. If you want bundled benefits, an out-of-pocket maximum, and simplified coordination of care, Medicare Advantage is worth a close look.

Step 3: Secure Prescription Drug Coverage

If you choose Original Medicare, add a Part D plan. If you choose Medicare Advantage, check whether your plan includes drug coverage (most do). Either way, don't skip this step — the late enrollment penalty is permanent and adds up quickly.

Step 4: Consider a Medigap Policy (Original Medicare Path Only)

If you stay with Original Medicare, that 20% coinsurance under Part B has no ceiling. A Medigap policy — sold by private insurers and standardized by letter (Plan G, Plan N, etc.) — can cover most or all of that gap. Note: you cannot have both a Medigap policy and a Medicare Advantage plan.

For cost details before you finalize any decision, our Medicare Costs at a Glance resource lays out current premiums, deductibles, and copays for every part side by side. And if you want to understand how premiums and deductibles work conceptually, see our guide to premiums and deductibles.