Key Takeaways

• Medicare is divided into several parts, each covering a different area of your healthcare needs. Understanding these parts helps you make informed choices.

• While Medicare Parts A and B are standard for most beneficiaries, Parts C and D involve private plan options and should be carefully evaluated.

What Are the Main Parts of Medicare?

Medicare in 2025 remains a federal health insurance program primarily for individuals aged 65 and older, though it also covers some younger individuals with certain disabilities or conditions. The program is split into distinct parts:

• Part A (Hospital Insurance)

• Part B (Medical Insurance)

• Part C (Medicare Advantage)

• Part D (Prescription Drug Coverage)

Each part serves a specific function, and understanding how they work can help you get the coverage you need without confusion.

Part A: Hospital Insurance

Part A helps cover:

• Inpatient hospital stays

• Skilled nursing facility care (short-term)

• Hospice care

• Some home health services

Eligibility and Costs in 2025

If you or your spouse paid Medicare taxes for at least 40 quarters, you qualify for premium-free Part A. If you didn’t, you may pay up to $518 per month in 2025. The deductible for each hospital benefit period is $1,676.

Coinsurance for extended stays includes:

• $419 per day for days 61–90

• $838 per day for lifetime reserve days

• $209.50 per day for skilled nursing facility care (days 21–100)

Part B: Medical Insurance

Part B covers outpatient care, including:

• Doctor visits

• Preventive services

• Outpatient surgeries

• Durable medical equipment

Costs in 2025

The standard monthly premium for Part B is $185, with a yearly deductible of $257. After meeting the deductible, you typically pay 20% of the Medicare-approved amount for covered services.

Higher-income individuals may pay more due to the Income-Related Monthly Adjustment Amount (IRMAA), based on their tax return from two years prior.

How Parts A and B Work Together

Parts A and B form what’s known as Original Medicare. They don’t cover everything—most notably:

• Routine dental, vision, and hearing care

• Prescription drugs

• Long-term custodial care

You can add coverage through separate plans, such as Part D or Medigap, or choose Part C as an alternative.

Part C: Medicare Advantage

Medicare Advantage (Part C) plans are offered by private companies approved by Medicare. These plans must cover everything Parts A and B do, and often include:

• Prescription drug coverage

• Dental, vision, and hearing services

• Wellness programs

You must be enrolled in both Part A and Part B to join a Part C plan. Though plan costs and coverage vary, the Medicare program ensures a minimum standard of coverage.

Part D: Prescription Drug Coverage

Part D helps cover the cost of prescription medications. Like Part C, these plans are offered through private insurers but regulated by Medicare.

Structure of Part D in 2025

Part D plans typically have four stages:

1. Deductible Stage: You pay 100% of drug costs until you reach the deductible, which can be up to $590 in 2025.

2. Initial Coverage Stage: You and your plan share costs until total drug expenses reach $5,030.

3. Catastrophic Coverage Stage: Beginning in 2025, once you reach the $2,000 out-of-pocket cap, your medications are fully covered for the rest of the year.

This change eliminates the previous coverage gap known as the “donut hole.”

Optional Coverage to Fill the Gaps

Original Medicare doesn’t cover everything. You may consider additional coverage for services like dental, vision, or long-term care. Here are two common choices:

Medigap (Medicare Supplement Insurance)

Medigap policies help pay for out-of-pocket costs like deductibles, coinsurance, and copayments under Original Medicare. These are offered by private companies and work alongside Parts A and B—but not Part C.

Standalone Part D Plans

If you’re on Original Medicare and not in a Medicare Advantage plan, you can add a standalone Part D plan for prescription drug coverage.

Enrollment Periods and Timing in 2025

Understanding when to enroll in Medicare is critical to avoiding late penalties or coverage gaps. These are your main options:

1. Initial Enrollment Period (IEP)

• Begins 3 months before your 65th birthday month

• Ends 3 months after your birthday month

You can sign up for Parts A and B during this time, as well as enroll in Part C or Part D.

2. General Enrollment Period (GEP)

• Runs from January 1 to March 31

• For those who missed IEP

• Coverage begins July 1

3. Medicare Advantage Open Enrollment Period

• January 1 to March 31

• Switch from one Medicare Advantage plan to another

• Or return to Original Medicare and join a Part D plan

4. Annual Enrollment Period (AEP)

• October 15 to December 7

• Make changes to Medicare Advantage or Part D plans

• Coverage begins January 1 of the following year

5. Special Enrollment Period (SEP)

Triggered by life events such as:

• Moving to a new area

• Losing other coverage

• Becoming eligible for Medicaid

SEPs vary in duration depending on the qualifying event.

Late Enrollment Penalties

Failing to enroll on time can result in long-term penalties:

• Part B Penalty: 10% increase in monthly premium for each 12-month period you were eligible but didn’t sign up.

• Part D Penalty: 1% of the national base premium for each month without coverage after your IEP.

These penalties are added to your premium and may last for as long as you have Medicare.

How Medicare Coordinates With Other Coverage

If you have employer coverage, retiree coverage, or other insurance (like TRICARE or Medicaid), Medicare may act as either primary or secondary payer depending on your situation. It’s important to:

• Confirm who pays first

• Avoid duplicate coverage

• Coordinate benefits to reduce out-of-pocket costs

Common Misunderstandings About Medicare Parts

• Myth: Medicare covers everything.

  Reality: It doesn’t cover services like dental, vision, hearing aids, or long-term custodial care.

• Myth: You are automatically enrolled at 65.

  Reality: Automatic enrollment only happens if you’re receiving Social Security benefits.

• Myth: Medicare Part D is optional without consequences.

  Reality: Not enrolling in Part D on time may trigger lifelong penalties.

What to Do Next for Smart Medicare Decisions

Now that you know how the Medicare parts work together, you can better evaluate your health needs, compare options, and avoid unnecessary expenses. Start by listing what types of care you regularly use—hospital, outpatient, medications—and compare that with what Original Medicare and private options offer.

If you’re approaching your 65th birthday or recently retired, reviewing your options in advance gives you more flexibility and time to make informed decisions.

Take the Next Step With Confidence

Medicare may seem overwhelming at first, but understanding the individual parts helps you make decisions that fit your health needs and financial comfort. Don’t hesitate to get professional advice tailored to your situation—get in touch with a licensed agent listed on this website for help selecting your coverage.