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

Part A: Hospital and Facility Coverage

Medicare Part A is often called hospital insurance. It covers inpatient care when you are formally admitted to a hospital, care in a skilled nursing facility (SNF) following a qualifying hospital stay, hospice care for those with a terminal illness, and limited home health services.

A key distinction: Part A covers skilled nursing facility stays only after at least three consecutive inpatient hospital days. It does not cover long-term custodial or personal care — a common source of confusion. Read more about what Medicare doesn't cover to avoid costly surprises.

Most people pay no monthly premium for Part A if they or a spouse worked and paid Medicare taxes for at least 10 years. Cost-sharing still applies, including a per-benefit-period deductible for hospital stays.

Part B: Doctor Visits and Outpatient Services

Medicare Part B is medical insurance. It covers two broad categories: medically necessary services (doctor visits, outpatient procedures, lab tests, durable medical equipment) and preventive services (annual wellness visits, certain screenings, and vaccines).

Unlike Part A, Part B always charges a monthly premium. After meeting an annual deductible, Medicare typically pays 80% of approved costs, leaving the remaining 20% as your responsibility — with no out-of-pocket cap under Original Medicare alone. Supplemental coverage (Medigap) or a Medicare Advantage plan can help manage that exposure.

Enrollment in Part B is not automatic for everyone. If you delay enrollment without creditable coverage from an employer, you may face a permanent late-enrollment penalty added to your premium for as long as you have Part B.

Part C: Medicare Advantage — A Different Way to Receive Benefits

Medicare Part C, known as Medicare Advantage, is an alternative way to receive your Part A and Part B benefits through a private insurance plan approved by Medicare. These plans must cover everything Original Medicare covers, but they structure costs differently — typically using provider networks (HMOs or PPOs) and annual out-of-pocket maximums that Original Medicare lacks.

Many Medicare Advantage plans bundle Part D drug coverage and may offer supplemental benefits such as dental, vision, or hearing allowances. However, these extras vary significantly by plan and geography, and network restrictions mean your current doctors may or may not participate.

Compare Medicare Advantage and Original Medicare side by side before deciding which approach fits your situation.

Part D: Prescription Drug Coverage

Medicare Part D provides prescription drug coverage. It is available as a standalone Prescription Drug Plan (PDP) added to Original Medicare, or it is integrated into many Medicare Advantage plans. Part D is offered only through private insurers approved by CMS.

Each Part D plan maintains a formulary — a list of covered drugs organized into tiers that determine your cost-sharing. Premiums, deductibles, and copays vary by plan, and higher-income enrollees pay an IRMAA surcharge.

Like Part B, Part D carries a late-enrollment penalty if you go without creditable drug coverage for 63 or more consecutive days after first becoming eligible. The penalty is added permanently to your monthly premium.

Review your Part D coverage annually. Use our Annual Benefits Review Checklist to confirm your plan's formulary still covers your medications each year.

This article is for general informational and educational purposes only and does not constitute personalized financial, legal, or insurance advice. Medicare rules and costs change annually. Consult a licensed insurance counselor, SHIP advisor, or qualified financial professional for guidance specific to your situation.