Medicare Parts A, B, C, and D: A Complete Breakdown

Medicare is structured into four separate parts, and each one covers a different set of healthcare services. Knowing what each part provides helps you make smarter choices about your coverage.

Part A: Hospital Insurance

Part A pays for inpatient and facility-based care, including:

• Inpatient hospital stays (semi-private room, meals, nursing care, medications)
• Skilled nursing facility care for up to 100 days following a qualifying hospital admission
• Home health services when you require skilled nursing or therapy in your home
• Hospice care for individuals diagnosed with a terminal illness

Most enrollees do not pay a monthly premium for Part A because they or their spouse contributed Medicare payroll taxes for at least 10 years. However, you are still responsible for deductibles and coinsurance on certain services.

Part B: Medical Insurance

Part B covers outpatient care and preventive health services, such as:

• Physician and specialist appointments
• Outpatient procedures and surgeries
• Laboratory tests, X-rays, and diagnostic imaging
• Preventive screenings like mammograms, colonoscopies, and yearly wellness visits
• Durable medical equipment such as wheelchairs and oxygen tanks
• Mental health services including counseling and psychiatric care

Part B has a monthly premium (which adjusts based on income), an annual deductible, and 20% coinsurance on most covered services.

Part C: Medicare Advantage

Part C, widely known as Medicare Advantage, offers an alternative way to get your Medicare benefits. These plans are provided by Medicare-approved private insurers and are required to cover all services included under Original Medicare (Parts A and B).

Many Medicare Advantage plans go further and also offer:

• Prescription drug coverage (Part D)
• Dental, vision, and hearing benefits
• Fitness and wellness programs
• Telehealth services

Available plan types include HMOs, PPOs, Private Fee-for-Service (PFFS), and Special Needs Plans (SNPs). Costs, provider networks, and extra benefits differ from plan to plan.

Part D: Prescription Drug Coverage

Part D assists with the cost of prescription medications. Important details include:

• Plans are sold by private insurers either as standalone policies or as part of a Medicare Advantage plan
• Every plan maintains a formulary (a list of covered drugs) arranged into cost tiers
• Costs include a monthly premium, an annual deductible (up to $615), and 25% coinsurance during the initial coverage phase, with a $2,100 annual out-of-pocket cap after which you pay $0 — the former coverage gap (donut hole) was eliminated under the Inflation Reduction Act
• Enrollment is available only during designated enrollment periods

Putting the Parts Together

Most Medicare beneficiaries follow one of two paths:

1. Original Medicare (Parts A + B) combined with a standalone Part D plan, often supplemented by a Medigap policy
2. Medicare Advantage (Part C) which generally bundles Parts A, B, and D into a single plan

The best combination for you depends on your healthcare requirements, preferred providers, prescription needs, and budget. Reviewing your options each year during the Annual Enrollment Period ensures you always have the most suitable coverage.