Updated: June 28, 2026
Advertising & Editorial Disclosure
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.
Medicare's four parts each cover a different layer of care. Parts A and B make up Original Medicare, administered by the federal government. Parts C and D are administered through private insurers approved by CMS. Most beneficiaries start with Parts A and B and build from there based on health needs and budget.
Medicare's four-part structure is specific to federal coverage, and the broader health insurance system works differently.
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 covers outpatient care: doctor visits, preventive screenings, durable medical equipment and mental health services. The standard premium is $202.90/month in 2026.
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 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.
Each part covers a distinct care setting. Part A covers facility-based services, and Part B covers clinical services. Part C is a private plan that wraps around both. Part D is outside Original Medicare and covers drugs only.
Part A (Hospital Insurance) | A three-day inpatient hospital stay is required before skilled nursing facility coverage begins. In the hospital, days 61 to 90 come with a daily coinsurance of $434, and skilled nursing facility days 21 to 100 cost $217 a day (per CMS). Hospice care is covered for beneficiaries whose doctor certifies a terminal illness. Homebound beneficiaries whose doctors order skilled care qualify for medically necessary home health visits. |
Part B (Medical Insurance) | Part B is the outpatient side of Original Medicare. It pays for doctor and specialist visits, outpatient procedures and surgery. Preventive services (cancer screenings, cardiovascular risk counseling and annual wellness visits) are at no cost at a participating provider. Durable medical equipment prescribed for home use is covered, as are outpatient mental health services and telehealth under current CMS extensions. |
Part C (Medicare Advantage) | A Medicare Advantage plan includes Parts A and B benefits into a private insurance structure. Most plans bundle prescription drug coverage without an added premium. Supplemental benefits (dental exams and cleanings, routine vision and eyeglasses, hearing aids and exams and fitness programs) vary by plan and aren't standard. In 2026, 60% of plans charge nothing beyond the Part B premium. The average in-network MOOP is $6,312 across all plan types, per MoneyGeek's analysis. |
Part D (Prescription Drug Coverage) | Part D is formulary-based drug coverage sold through CMS-approved private insurers. Each plan groups drugs into tiers that set the cost-sharing at the pharmacy. The Inflation Reduction Act capped annual out-of-pocket spending on covered drugs at $2,100 in 2026, and the maximum plan deductible is $615 that year. Beneficiaries with limited income may qualify for Extra Help, a federal program that lowers both Part D premiums and cost-sharing. |
Every Medicare part has defined exclusions. When a service is excluded, the cost falls entirely on the beneficiary unless a supplemental plan covers it. Medicare Advantage may cover some items Original Medicare excludes, but those benefits vary by plan and location and aren't guaranteed.
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 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.
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 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.
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.
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.
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).
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.
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.
The IEP is a seven-month window around the 65th birthday. Three months before the birthday month, the birthday month itself and three months after.
Timing matters within that window because enrolling in the first three months starts coverage on the birthday month. Every month of delay into the back half of the IEP pushes the coverage start date one to three months further out.
Active coverage through an employer group health plan (whether through the beneficiary's own job or a spouse's) suspends the obligation to enroll in Parts B and D without triggering a penalty. When that employer coverage ends, an eight-month SEP opens for Part B. Part D gets a two-month window. Both clocks start at the end of the coverage, not at the end of the job.
Beneficiaries who missed the IEP and don't qualify for an SEP have one remaining path: the General Enrollment Period, open January 1 through March 31 each year, with coverage starting July 1.
Missing the IEP without creditable coverage also triggers a permanent Part B late enrollment penalty (10% added to the standard premium for every 12-month gap) so the cost of waiting compounds with each passing year.
Parts A and B enrollment gives access to the Annual Election Period (October 15 through December 7), which is the window for joining or switching Medicare Advantage and Part D plans, with coverage taking effect January 1.
eneficiaries enrolling in Medicare for the first time also get an Initial Coverage Election Period that aligns with their IEP, so they don't have to wait for the next Annual Election Period.
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.
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.
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.
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.
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.
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.
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 spent nearly a decade analyzing the market, first at LendingTree and now at MoneyGeek, where he produces original research on hundreds of carriers and millions of rates across auto, home, renters, health and life insurance.
He covers economics and insurance at MoneyGeek, and his work has been featured in The Washington Post, The New York Times and NPR, among other outlets.
Like all MoneyGeek analysts, he draws on independent cost and consumer experience data. No insurance company partnership influences his recommendations.
Mark holds a B.A. from Boston College and an M.A. in Economics and International Relations from Johns Hopkins University. He started his career in financial risk management at State Street and is also a five-time “Jeopardy!” champion.
