Medicare Basics: Parts A, B, C, and D Explained

Bottom line: Medicare becomes available at 65. It has four distinct parts: Part A (hospital), Part B (doctors/outpatient), Part C (private Medicare Advantage plans), and Part D (prescriptions). Most people pay nothing for Part A, about $185/month for Part B in 2026, and choose between Original Medicare (A+B+Medigap+D) or Medicare Advantage (Part C). Missing enrollment windows creates permanent premium penalties.

Medicare is the federal health insurance program for Americans 65 and older (and for some younger people with disabilities or certain conditions). It is not automatic: you must actively enroll. And the enrollment windows have real financial consequences if missed.

The Four Parts

Part A: Hospital Insurance

What it covers: Inpatient hospital care, skilled nursing facility care (after qualifying hospital stay), home health care, hospice care.

What you pay: Most people pay $0/month for Part A premium (if you or your spouse have 40+ quarters of Medicare-covered employment). The deductible for each benefit period in 2026 is approximately $1,680.

What to know: Part A does not cover most outpatient care, regular doctor visits, or prescriptions.

Part B: Medical Insurance

What it covers: Doctor visits, outpatient care, preventive services, medical equipment, lab tests, some home health care.

What you pay: The standard 2026 Part B premium is approximately $185/month (adjusted higher at higher incomes: the Income-Related Monthly Adjustment Amount, or IRMAA, applies above certain income thresholds). After meeting the annual deductible (~$257 in 2026), Part B covers 80% of approved costs; you cover the remaining 20%.

What to know: The 20% coinsurance has no annual cap under Original Medicare, which is why most people add supplemental coverage (Medigap).

Part C: Medicare Advantage

What it is: A private insurance alternative to Original Medicare. Private insurers contract with Medicare to provide all Part A and B benefits (and usually Part D) through their own network plans.

Cost structure: Usually lower premiums than Original Medicare + Medigap, but uses networks (HMO or PPO structure) and prior authorization. Many plans include additional benefits (dental, vision, hearing).

Trade-off: Less flexibility than Original Medicare (no out-of-network coverage in many HMO plans); prior authorization can delay care. Best for people who want lower premiums and do not travel frequently.

Part D: Prescription Drug Coverage

What it covers: Outpatient prescription drugs through private plans that contract with Medicare.

What you pay: Varies widely by plan (premiums typically $10–60/month in 2026). Plans have their own formularies (drug lists), so check your prescriptions are covered before enrolling.

What to know: Covered under Medicare Advantage if you choose Part C; standalone Part D plan needed if on Original Medicare (Parts A + B).

Enrollment Periods

Initial Enrollment Period (IEP): 7-month window around your 65th birthday: 3 months before, your birthday month, and 3 months after. This is the primary enrollment window.

Special Enrollment Period (SEP): If you have employer coverage at 65 (through your own job or a spouse's), you can delay enrollment without penalty and enroll during a SEP when that coverage ends (8-month window after coverage ends).

General Enrollment Period (GEP): If you missed IEP and do not qualify for SEP, January 1 – March 31 each year. Coverage starts July 1. Late enrollment penalties apply.

Original Medicare vs. Medicare Advantage

The choice depends on your health situation, travel habits, preferred providers, and budget. People who travel frequently, have complex health needs, or see specialists regularly often prefer Original Medicare's flexibility. People who want lower premiums and primarily use in-network providers often prefer Medicare Advantage.

Medicare premiums, deductibles, and program details change annually. Verify current amounts at Medicare.gov, the Centers for Medicare & Medicaid Services, or by calling 1-800-MEDICARE.