Medicare is divided into four parts, each covers a different layer of care. Parts A and B form Original Medicare, run by the federal government. Parts C and D are delivered through private insurers approved by CMS. Most beneficiaries need at least Parts A and B as a foundation, then add coverage based on their health and budget. The broader health insurance system includes many plan types, but Medicare's four-part structure is unique to federal coverage.
The Parts of Medicare: A, B, C & D Explained
Updated: April 24, 2026
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Key Takeaways
The four parts of Medicare cover hospital care, outpatient services, prescription drugs and private plan bundling.
Part A has no premium for most enrollees who worked at least 10 years, per CMS.
Part C (Medicare Advantage) replaces Original Medicare through a private insurer and often includes Part D.
Most people must enroll in Parts A and B before they can add Part C or D.
What Are the Four Parts of Medicare?
- Annual deductible: $283 in 2026, per CMS
- Medicare pays 80% of approved costs after the deductible
- Beneficiary owes the remaining 20% with no out-of-pocket cap under Original Medicare
- $2,100 annual out-of-pocket cap on covered drugs in 2026, per the Inflation Reduction Act
- Formulary tiers determine cost-sharing per drug
- Late enrollment without creditable coverage triggers a permanent penalty
Part A: Hospital Insurance
Part A covers inpatient hospital stays, skilled nursing facility care, hospice and some home health services. Most enrollees pay no monthly premium if they worked at least 10 years in Medicare-covered employment.
The 2026 Part A inpatient deductible is $1,736 per benefit period, per CMS. A benefit period resets after 60 consecutive days without inpatient care.
Part B: Medical Insurance
Part B covers outpatient care: doctor visits, preventive screenings, durable medical equipment and mental health services. The standard premium is $202.90/month in 2026.
Part C: Medicare Advantage
Medicare Advantage replaces Original Medicare through a private insurer. Sixty percent of plans charge $0 beyond the Part B premium in 2026 and the average in-network out-of-pocket maximum across all plan types is $6,312, per MoneyGeek's analysis of CMS data.
Most Medicare Advantage plans bundle Part D drug coverage. Many also include supplemental benefits such as dental, vision and hearing that Original Medicare does not cover.
Part D: Prescription Drug Coverage
Part D covers prescription drugs through private insurer formularies organized into cost tiers. The 2026 out-of-pocket cap is $2,100 for covered drugs, per the Inflation Reduction Act and CMS.
What Does Each Part of Medicare Cover?
The four parts divide Medicare's coverage across distinct care settings. Part A and Part B cover facility and clinical services respectively. Part C is a private plan wrapper around both. Part D sits outside Original Medicare entirely and covers drugs only.
Part A (Hospital Insurance) | Inpatient hospital stays. Skilled nursing facility care after a qualifying three-day hospital admission. Daily coinsurance of $434 applies from days 61 to 90 and $217 per day for days 21 to 100 in a skilled nursing facility, per CMS. Hospice care for beneficiaries with a certified terminal illness. Medically necessary home health visits when the beneficiary is homebound and a doctor orders skilled care. |
Part B (Medical Insurance) | Doctor and specialist visits. Outpatient procedures and surgery. Preventive screenings including cancer screenings, cardiovascular risk counseling and annual wellness visits at no cost when using a participating provider. Durable medical equipment prescribed for home use. Outpatient mental health services including therapy and psychiatric evaluations. Telehealth services under current CMS extensions. |
Part C (Medicare Advantage) | All services covered under Parts A and B. Prescription drugs in most plans (bundled Part D). Supplemental benefits that vary by plan: dental exams and cleanings, routine vision and eyeglasses, hearing aids and exams, fitness programs. Sixty percent of plans charge $0 beyond the Part B premium in 2026, with an average in-network MOOP of $6,312 across all plan types, per MoneyGeek's analysis. |
Part D (Prescription Drug Coverage) | Formulary-based prescription drug coverage through CMS-approved private insurers. Drugs organized into cost tiers. The 2026 out-of-pocket cap is $2,100 for covered drugs, per the Inflation Reduction Act. Maximum plan deductible is $615 in 2026. Low-income beneficiaries may qualify for the Extra Help program, which reduces Part D premiums and cost-sharing. |
What Is Not Covered Under Medicare Part A, B, C and D?
Each Medicare part has defined exclusions. Costs for excluded services fall entirely on the beneficiary unless a supplemental plan covers them. Part C (Medicare Advantage) may cover some items Original Medicare excludes, but benefits vary by plan and location and are not guaranteed.
- Inpatient psychiatric care beyond 190 lifetime days, per CMS
- Skilled nursing facility care past 100 days per benefit period
- Home health visits that are custodial rather than skilled
- Outpatient prescription drugs (covered under Part D)
- Benefits not listed in the plan's Evidence of Coverage, even if Original Medicare covers them
- Out-of-network specialist visits without a referral on plans that require one
- Non-emergency care outside the plan's service area
- Experimental treatments not on the plan's formulary or approved by CMS
Part A: What It Does Not Cover
Part A does not cover custodial care, most dental and vision services, hearing aids or private-duty nursing, regardless of whether a hospital stay preceded the need.
Part B: What It Does Not Cover
Part B excludes prescription drugs dispensed outside a clinical or infusion setting, routine dental, vision and hearing services, cosmetic procedures and long-term custodial care at home. Acupuncture is covered only for chronic lower back pain under specific CMS approval.
Overseas care is excluded except in narrow emergency situations near a US border, per CMS. The 20% coinsurance under Part B has no annual cap, leaving uncovered costs open-ended.
Part C: What It Does Not Cover
Medicare Advantage plans do not cover out-of-network care in non-emergencies for HMO enrollees or services requiring prior authorization that was not obtained in advance.
Part D: What It Does Not Cover
Part D excludes drugs not listed on the plan's formulary, over-the-counter medications and supplements (even if prescribed) and drugs already covered under Part B such as certain chemotherapy agents and clinical vaccines.
Weight-loss drugs, fertility drugs and erectile dysfunction medications are excluded from most standard formularies. Brand-name drugs where a generic equivalent exists are usually not covered at the brand tier unless the plan specifically includes them.
Part A vs. Part B vs. Part C vs. Part D
Parts A and B are federal programs with no annual out-of-pocket cap. Parts C and D are private plans with federally mandated spending limits. That structural difference makes the Original Medicare vs. Medicare Advantage decision a financial question as much as a coverage one.
What it covers | Inpatient hospital, skilled nursing, hospice | Outpatient, doctor visits, DME, preventive care | Replaces Parts A and B, usually includes Part D | Prescription drugs (formulary-based) |
Monthly premium (2026) | $0 for most, $311 (30–39 quarters) or $565 (fewer than 30 quarters) without sufficient work quarters, per CMS | $202.90 standard, higher with IRMAA | $0 for 60% of plans, avg. $53 (HMO) to $63 (PPO) for plans with a premium. | Varies, national base beneficiary premium $38.99 |
Annual deductible (2026) | $1,736 per benefit period | $283 per calendar year | Varies, many plans charge $0 for medical and drug deductible up to $615 | Up to $615 maximum, per CMS |
Out-of-pocket cap | None under Original Medicare | None under Original Medicare | Avg. $6,312 in-network across all plan types, max allowed $9,250. | $2,100 on covered drugs (2026) |
Provider flexibility | Any Medicare-accepting provider | Any Medicare-accepting provider | Network-based (HMO or PPO in most plans) | Any pharmacy in the plan's network |
Administered by | Federal government (CMS) | Federal government (CMS) | CMS-approved private insurer | CMS-approved private insurer |
Drug coverage | No | No | Usually yes (bundled) | Yes (stand-alone) |
The missing out-of-pocket cap under Parts A and B is Original Medicare's biggest gap. A Medicare Supplement plan fills some or all of that exposure.
How the Parts of Medicare Fit Together
Most beneficiaries choose between two paths: Original Medicare with supplemental coverage or Medicare Advantage. The path determines which parts are active and how gaps are filled. Beneficiaries on the Original Medicare path usually hold Parts A, B, a Medigap policy and a stand-alone Part D plan. Medicare Advantage beneficiaries use Part C as their primary coverage, with Part D usually bundled.
Original Medicare + Medigap + Part D | Part A + Part B + Part D | Stand-alone Part D plan | Medigap policy (Plan G, Plan N or other) | Beneficiaries who want broad provider access and predictable costs |
Medicare Advantage (Part C) | Part C (replaces A + B) | Usually bundled | Plan's own MOOP (avg. $6,312 in-network, 2026) | Beneficiaries who want $0 premium options or extra benefits in a network plan |
Original Medicare only | Part A + Part B | None until Part D added | None | Rarely advisable without a plan to add drug and gap coverage |
A beneficiary can't hold both a Medicare Advantage plan and a Medigap policy simultaneously. Switching back from Medicare Advantage to Original Medicare may trigger medical underwriting for Medigap in most states. The Medicare Advantage vs. Medicare Supplement comparison covers that trade-off in full.
Which Medicare Part Is Right for You?
Most beneficiaries need Parts A and B as a baseline. What you add depends on your prescriptions, budget and provider preferences. The scenarios below match common reader situations to the most appropriate part or combination.
You're admitted to the hospital or need skilled nursing care | Part A | Part A covers inpatient stays and post-hospital skilled care. Without it, full facility costs fall to you. The 2026 inpatient deductible is $1,736, per CMS. |
You see doctors regularly or need outpatient procedures | Part B | Part B covers outpatient visits, screenings and DME. After the $283 annual deductible, you pay 20% of approved costs, per CMS. |
You take regular prescription drugs | Part D or Part C with bundled drug coverage | Part D caps drug out-of-pocket costs at $2,100 in 2026, per CMS. A Part C plan with bundled Part D achieves the same in one policy. |
You want one plan to replace Original Medicare | Part C (Medicare Advantage) | Sixty percent of Part C plans charge $0 beyond the Part B premium in 2026. The average in-network MOOP is $6,312, per MoneyGeek's analysis. |
You travel frequently or split time between states | Parts A + B with Medigap | Original Medicare accepts any Medicare-participating provider nationwide. A Medigap policy fills the uncapped 20% coinsurance gap across all locations. |
You want the lowest cost HMO plan | Part C, HMO plan type | HMO plans average $53/month for plans with a premium and $0 for 76% of HMO plans in 2026, the lowest cost across all Medicare Advantage plan types, per MoneyGeek's analysis. |
Source: CMS 2026 Medicare costs, MoneyGeek analysis of CMS CY2026 Landscape file (64,249 plans).
When You Can Enroll in Each Part of Medicare
Medicare enrollment windows differ by part and missing them has permanent financial consequences. Parts A and B share the same enrollment timeline. Part C and Part D enrollment depends on which path a beneficiary chooses. Beneficiaries who have employer coverage may be able to delay Parts B and D without penalty, but specific conditions must be met before delaying.
DELAYING PART B HAS A PERMANENT COST
Many beneficiaries assume they can delay Part B and catch up later without consequences. The late enrollment penalty adds 10% to your Part B premium for every 12 months you went without coverage and it never goes away. Without active employer coverage, enrolling during your Initial Enrollment Period is almost always the right call.
- 1Step 1: Initial Enrollment Period (Parts A, B, C and D)
The Initial Enrollment Period (IEP) runs for seven months: the three months before the month you turn 65, your birthday month and the three months after. Enrolling during the first three months means coverage starts on your birthday month. Delaying into the final months of the IEP pushes your start date back by one to three months.
- 2Step 2: Special Enrollment Period (If You Have Employer Coverage)
Beneficiaries covered under an active employer group health plan through their own or their spouse's current employment can delay Parts B and D without penalty. Once that coverage ends, an eight-month Special Enrollment Period opens for Part B. The Part D Special Enrollment Period is two months. Both windows begin when coverage ends, not when employment ends.
- 3Step 3: General Enrollment Period (If You Missed Your IEP)
Beneficiaries who missed their IEP and do not qualify for a Special Enrollment Period can enroll in Parts A and B during the General Enrollment Period (January 1 through March 31 each year), with coverage starting July 1. A late enrollment penalty applies to Part B, 10% added to the standard premium for each 12-month period without coverage.
- 4Step 4: Medicare Advantage and Part D Open Enrollment
Once enrolled in Parts A and B, beneficiaries can join or switch a Medicare Advantage or Part D plan during the Annual Election Period (October 15 through December 7 each year) for coverage starting January 1. New Medicare enrollees have an additional Initial Coverage Election Period aligned with their IEP.
Medicare's Four Parts: Bottom Line
Medicare's four parts each cover a different layer of care. Parts A and B form Original Medicare. Part C packages both through private insurers, with 60% of plans charging $0 beyond the Part B premium in 2026, per MoneyGeek's analysis. Part D covers prescriptions with a $2,100 annual cap. The right combination depends on your providers, prescriptions and cost tolerance.
Parts of Medicare: FAQ
We've answered the most frequently asked questions about Medicare's parts below, covering costs, enrollment period, coverage gaps and how the parts work together:
Do I need all four parts of Medicare?
Most beneficiaries need Parts A and B as a foundation. Whether you add Part C or Part D depends on how you want to receive your benefits. A Medicare Advantage plan (Part C) often includes Part D, so separate enrollment is not needed if you choose that path.
Is there a penalty for not signing up for Part B?
The Part B late enrollment penalty adds 10% to your monthly premium for every 12-month period you went without Part B coverage. That surcharge is permanent. Beneficiaries with active employer coverage can delay without penalty, but must enroll within eight months of losing that coverage.
Can I have Medicare Advantage and a Medigap plan at the same time?
Medicare Advantage and Medigap cannot be held simultaneously. Medigap supplements Original Medicare (Parts A and B), not Medicare Advantage. Insurers are prohibited from selling a Medigap policy to someone enrolled in Medicare Advantage under current federal rules.
What is the Part D out-of-pocket cap in 2026?
The Part D out-of-pocket cap is $2,100 for covered prescription drugs in 2026, per the Inflation Reduction Act and CMS. Once that threshold is reached, catastrophic coverage starts and the enrollee pays nothing further for covered drugs that year.
What does Medicare not cover across all four parts?
Original Medicare does not cover most dental, vision, hearing aids, long-term custodial care or routine foot care. Part C may include some of these as supplemental benefits, but coverage varies by plan.
How does Medicare coordinate with employer coverage if I'm still working at 65?
Beneficiaries actively employed at 65 and covered under a group health plan from a large employer (20 or more employees) can delay Parts B and D without penalty. The employer plan pays primary. Once coverage ends, the Special Enrollment Period opens.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty (P&C) Insurance Producer in Connecticut, is MoneyGeek's resident insurance expert. He has analyzed the insurance market for almost a decade, first with LendingTree and now with MoneyGeek, conducting original research on hundreds of insurance companies and millions of insurance rates for insurance shoppers.
He writes about economics and insurance on MoneyGeek, breaking down complex topics so people can have confidence in their purchase. Like all MoneyGeek analysts, Mark collects and analyzes independent cost and consumer experience data on insurance companies to provide objective recommendations in our content that are independent of any of MoneyGeek's insurance company partnerships.
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Mark holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He started his career working in financial risk management at State Street before transitioning to analysis of the personal insurance market. He's also a five-time Jeopardy champion!