What are the different parts of Medicare?
Medicare has four parts that provide a combination of hospital and medical insurance, flexible coverage options, and prescription drug coverage.
Medicare is a federal health insurance program in the United States that provides healthcare for older people and people with certain disabilities. The benefits and cost depend on which part of Medicare someone enrolls in.
Glossary of Medicare terms
We may use a few terms in this article that can be helpful to understand when selecting the best insurance plan:
Out-of-pocket costs: An out-of-pocket cost is the amount a person must pay for medical care when Medicare does not pay the total cost or offer coverage. These costs can include deductibles, coinsurance, copayments, and premiums.
Deductible: This is an annual amount a person must spend out of pocket within a certain period before an insurer starts to fund their treatments.
Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, this is 20%.
Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
What is Medicare?
The Centers for Medicare and Medicaid Services (CMS) administers Medicare. In 2022, 65.1 million Americans had Medicare, and 3.9 million of those were new beneficiaries.
Medicare has four parts. Part A and Part B provide hospital and medical insurance, while Part C and Part D provide flexibility in additional coverage and prescription drugs.
Original Medicare includes Part A and Part B. Medicare Part D provides prescription drug coverage as an optional add-on service for people with original Medicare.
Medicare Part C, also known as Medicare Advantage, provides a bundled alternative to original Medicare and may include prescription drug coverage.
Original Medicare
Someone with original Medicare (Part A and Part B) can visit any doctor, clinic, or hospital in the U.S. that accepts Medicare. They do not need prior permission or authorization from Medicare or their primary care doctor.
The government pays directly for the services, leaving some out-of-pocket cost sharing for the beneficiary to pay.
Medicare Part A
Medicare Part A is hospital insurance. It covers:
hospital stays as an inpatient
stays in a skilled nursing facility
home healthcare
People do not pay a premium for their Part A coverage if they have paid enough Social Security taxes in the U.S. If people do not qualify for premium-free coverage, they may need to pay a monthly fee.
Medicare Part B
Medicare Part B is medical insurance. It covers necessary medical supplies and services to treat an individual’s health condition. This may include:
outpatient care
preventive services such as vaccinations
durable medical equipment, such as wheelchairs
If someone needs temporary home rehabilitative services, such as physical therapy, Part B provides coverage as long as a doctor has ordered the services to treat a health condition.
Part B has an annual deductible, monthly premium, and coinsurance costs.
Medicare Part C
Private, Medicare-approved insurance companies offer Medicare Part C, also called Medicare Advantage plans.
Advantage plans offer the same coverage as original Medicare and may include additional benefits such as:
Many Medicare Advantage plans also include prescription drug coverage.
Advantage plans cap the out-of-pocket costs for covered healthcare. This means that after a person spends a specified amount on healthcare during the year, the plan covers all Medicare-approved expenses until the end of the year.
Medicare uses a star rating system for Part C plans. People can use this online tool to find Advantage plans in their state.
Medicare Part D
People with original Medicare can enroll in Medicare Part D, which helps with prescription drug costs.
Private insurance companies offer Medicare Part D plans, which Medicare classifies using a star rating system. Plan availability and costs differ between providers and locations.
Each prescription drug plan has its own formulary, which is a list of the medications it covers. Formularies cover specific generic and brand-name prescription drugs. Each plan must include certain categories of drugs, but the individual drug may vary by the plan and provider.
The formulary may change the drugs it covers at any time. If someone fills a prescription for a drug that is not in their plan’s formulary, they may have to pay the total retail cost of the drug.
Medicare Part D costs include a monthly plan premium, yearly deductible, copays, and coinsurance.
Medigap
Private insurance companies offer Medigap, which is also known as Medicare supplement insurance.
Someone with original Medicare must pay certain out-of-pocket expenses, including copays, coinsurance, and deductibles. A Medigap plan helps cover these costs.
Some Medigap plans also cover additional services, such as medical care outside the United States.
Medicare standardizes the 10 Medigap plans and designates each plan with a letter. This means that plans with the same letter provide the same benefits no matter where in the country someone lives or which provider they use.
Individuals pay a monthly premium for a Medigap policy, plus any premiums for original Medicare.
Comparison of Medicare parts
People can compare the different parts of Medicare in the table below:
Service | Part A | Part B | Part C | Part D | Medigap |
|---|---|---|---|---|---|
✔ | ✔ | ||||
✔ | ✔ | ||||
✔ | ✔ | ||||
✔ | ✔ | ||||
✔ | ✔ | ||||
✔ | ✔ | ||||
✔ | ✔ | ||||
✔ |
Enrolling in Medicare
People can join a Medicare plan at set times during the year. To avoid late enrollment penalties, a person can enroll in Medicare as soon as they become eligible. Enrollment dates include:
Initial enrollment: The initial Medicare enrollment period begins 3 months before someone turns 65, includes the birthday month, and ends 3 months later.
General enrollment: The general enrollment period is from January 1st to March 31st for coverage that starts on July 1st.
Special enrollment: The special enrollment period is for certain life events, such as moving to a new location.
Open enrollment: The open enrollment period is from October 15th to December 7th, during which a person can add, drop, or change between Medicare Advantage plans and original Medicare and add or change Part D plans.
How much does Medicare cost?
Medicare costs vary depending on the various parts, plans, and a person’s circumstances.
Part A costs
For most people, Medicare Part A is premium-free, provided they pay Medicare taxes for 40 quarters or more. If someone paid less tax, they must pay a Part A premium.
In 2025, the monthly Part A premium is $285 if someone paid Medicare taxes for 30 to 39 quarters. This increases to $518 monthly if they paid less than 30 quarters.
For covered health services, the 2025 deductible is $1,676 for each benefit period.
When someone stays in a hospital, they do not have to pay coinsurance for the first 60 days. Between days 61 and 90, they pay $419 coinsurance daily, which increases to $838 coinsurance per day beyond day 91.
People pay $209.50 daily from days 21 to 100 of a skilled nursing facility stay and pay the total costs after 100 days.
Part B costs
The standard 2025 Part B premium is $185 per month, providing an individual’s annual income is not above $106,000.
The premium increases with income. For example, if someone’s income is over $500,000 per year, the premium will cost $628.90 in 2025.
The Part B deductible is $257 in 2025. After someone meets their deductible, usually they must pay 20% of the Medicare-approved amount for covered healthcare services.
Part C costs
Premiums vary between Advantage plans. Some insurance providers offer zero-premium plans, also known as premium-free plans.
According to the Kaiser Family Foundation, in 2024, the average enrollment-weighted premium was $14 a month, and 75% of Medicare Advantage enrollees with prescription drug coverage did not pay an additional premium.
Plans also have copays and deductibles. The out-of-pocket costs may be lower than original Medicare and have an annual limit.
Part D
Premiums vary by plan and the drugs they cover. The basic premium in 2025 is $36.78.
Summary
Medicare is a U.S. federal health insurance program, with four distinct parts. Between them, Part A, Part B, Part C, and Part D provide healthcare programs for older people and people with specific disabilities.
The various parts of Medicare offer inpatient and outpatient care, prescription drug coverage, and more.
The specific benefits and costs that apply to someone will depend on which Medicare parts they enroll in. Costs may also vary depending on a person’s income and how much tax they have paid.
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