Medicare Parts A, B, C, and D, Explained Simply

Last reviewed: July 2026

The big picture: four parts, two paths

Medicare is not one insurance policy. It is a set of four parts, each covering a different slice of health care. Two of them — Part A (hospital) and Part B (medical) — are run directly by the federal government and together are called Original Medicare. The other two — Part C (Medicare Advantage) and Part D (prescription drugs) — are sold by private insurance companies under contracts with Medicare.

Nearly everyone with Medicare ends up on one of two paths: Original Medicare (Parts A and B, often paired with a standalone Part D drug plan and sometimes a Medigap supplement), or a Medicare Advantage plan (Part C), which bundles A, B, and usually D into a single private plan. Understanding what each part does makes that choice much easier to think through.

Part A: hospital insurance

Part A covers inpatient hospital stays, skilled nursing facility (SNF) care after a qualifying hospital stay, hospice care, and some home health care.

Most people pay no monthly premium for Part A, because they (or a spouse) paid Medicare payroll taxes for at least 10 years — about 40 quarters of work. People with shorter work histories can buy Part A: in 2026, the monthly premium is $311 for those with 30 to 39 quarters and $565 for those with fewer than 30 quarters.

Premium-free does not mean cost-free. Part A cost-sharing works in "benefit periods," which begin when you are admitted as an inpatient and end after 60 days in a row without inpatient or SNF care. For 2026:

Inpatient hospital deductible: $1,736 per benefit period (not per year — you can owe it more than once in a year).
Hospital days 1–60: $0 coinsurance after the deductible; days 61–90: $434 per day; each of your 60 "lifetime reserve" days after day 90: $868 per day.
Skilled nursing facility: days 1–20 are $0; days 21–100 are $217 per day; after day 100, Medicare pays nothing.

Part B: medical insurance

Part B covers most care that happens outside a hospital bed: doctor visits, outpatient services, lab tests, durable medical equipment, ambulance services, many preventive services, and some drugs administered in a clinical setting (such as infusions).

Everyone with Part B pays a monthly premium. In 2026, the standard premium is $202.90 per month, and the annual deductible is $283. After the deductible, you typically pay 20 percent of the Medicare-approved amount for covered services — and, importantly, Original Medicare puts no annual cap on that 20 percent. People with higher incomes pay more for Part B through an income-related surcharge known as IRMAA, based on the tax return from two years earlier.

Part B is voluntary, but delaying it without other qualifying coverage (such as from a current employer) can trigger a lifelong late-enrollment penalty. The timing rules matter; see our guide to Medicare enrollment periods for how the windows work.

Part C: Medicare Advantage

Part C is not a separate benefit — it is a different way to receive Parts A and B. Private insurers offer Medicare Advantage plans that must cover everything Original Medicare covers (except hospice, which remains under Part A). Most also include Part D drug coverage, and many add extras such as dental, vision, or hearing benefits.

The trade-offs are structural. Medicare Advantage plans typically use provider networks (HMOs or PPOs) and may require prior authorization for some services, while Original Medicare lets you see any provider that accepts Medicare. In exchange, Advantage plans cap your yearly spending: in 2026, a plan's in-network out-of-pocket maximum for Part A and B services cannot exceed $9,250, and many plans set lower limits — KFF reports the enrollment-weighted average in-network limit is about $5,421 in 2026.

You must be enrolled in both Part A and Part B to join a Medicare Advantage plan, and you keep paying the Part B premium. Many Advantage plans charge little or no additional premium on top of it, though plans with richer benefits may cost more. For a fuller comparison of the two paths, see Medicare Advantage vs. Original Medicare.

Part D: prescription drug coverage

Part D covers outpatient prescription drugs — the medications you pick up at a pharmacy or receive by mail. It is available two ways: as a standalone plan added to Original Medicare, or built into a Medicare Advantage plan.

Premiums vary widely by plan and region, so there is no single "Part D premium." Higher-income enrollees pay an added IRMAA surcharge on top of their plan's premium. Cost-sharing in 2026 follows a standard framework that plans can modify:

Deductible: no plan may charge more than $615 (many charge less, or none).
After the deductible, you pay cost-sharing set by your plan — under the standard benefit, 25 percent of drug costs.
Once your out-of-pocket drug spending reaches $2,100 in 2026, you pay $0 for covered drugs for the rest of the year. This annual cap, created by the Inflation Reduction Act, replaced the old "donut hole."

Part D also carries a late-enrollment penalty if you go 63 days or more in a row without Part D or other creditable drug coverage after your Initial Enrollment Period ends, and all plans must offer the option to spread drug costs across the year in monthly installments. Details are in our guide to Part D drug coverage.

How the parts fit together

Here is how the pieces combine in practice:

Path 1 — Original Medicare: Part A + Part B, usually with a standalone Part D plan. Because Original Medicare has no out-of-pocket maximum, many people add a Medigap (Medicare Supplement) policy, sold by private insurers, to cover deductibles and the 20 percent coinsurance. Medigap works only with Original Medicare — see Medigap basics.
Path 2 — Medicare Advantage: Part C bundles A, B, and usually D into one plan with one card, networks, and a built-in spending cap. You cannot use Medigap with an Advantage plan.

A useful mental model: A and B are the foundation everyone has; C is an alternative delivery system for that foundation; D is the drug layer you add either separately or inside C.

Where to get trustworthy help

Which path fits best depends on your health, budget, medications, preferred doctors, travel habits, and whether you qualify for help paying costs — there is no answer that is right for everyone, and this guide cannot make that call for you. Free, unbiased help is available: the official Medicare Plan Finder compares plans in your area, 1-800-MEDICARE operates around the clock, and every state runs a State Health Insurance Assistance Program (SHIP) offering one-on-one counseling at no charge — find yours at shiphelp.org. Note that all dollar figures above are for 2026 and most are adjusted annually.

Sources

This guide is for general education only and is not medical, legal, insurance, or financial advice. For decisions about your own coverage, use official sources or free help from your SHIP counselor.