Key Takeaways

• Medicare is divided into four main parts: A, B, C, and D, each serving a different purpose in covering healthcare expenses.

• Understanding how these parts work together can help you make informed decisions about coverage, costs, and enrollment.

Breaking Down Medicare Parts: What You Need to Know

Medicare is an essential part of healthcare for millions of Americans, yet it can feel confusing with all the different parts, rules, and enrollment periods. If you’re trying to figure out how Medicare works and what each part actually covers, you’re in the right place. Let’s take a step back and look at Medicare in a way that makes sense—without all the complicated jargon.

Medicare Part A: Hospital Coverage and More

Medicare Part A is often referred to as hospital insurance. If you’ve worked and paid Medicare taxes for at least 10 years (40 quarters), you typically don’t have to pay a monthly premium for Part A. But what does it actually cover?

What Part A Covers

• Inpatient hospital stays (up to 90 days per benefit period, plus an additional 60 lifetime reserve days)

• Skilled nursing facility (SNF) care, with coverage for up to 100 days per benefit period

• Hospice care for individuals with a terminal illness

• Limited home healthcare services

What You’ll Pay

Even though many people don’t pay a premium, there are still out-of-pocket costs. In 2025, the hospital deductible is $1,676 per benefit period. If you stay in the hospital longer than 60 days, daily coinsurance kicks in, with costs rising the longer you stay. After 90 days, lifetime reserve days come into play, but these are limited.

For skilled nursing facility care, Medicare covers the first 20 days in full, but from days 21-100, you’ll be responsible for a daily copayment.

Medicare Part B: Your Medical Insurance

Part B is the portion of Medicare that covers doctor visits, outpatient care, and preventive services. Unlike Part A, everyone who enrolls in Part B pays a monthly premium.

What Part B Covers

• Doctor visits and outpatient care

• Preventive screenings, vaccines, and annual wellness visits

• Ambulance services

• Durable medical equipment (DME), such as wheelchairs and oxygen supplies

• Mental health outpatient services

What You’ll Pay

In 2025, the standard monthly premium for Part B is $185. There’s also an annual deductible of $257, after which you generally pay 20% of Medicare-approved costs for most services. Preventive care, however, is often covered at 100%.

If you delay signing up for Part B when first eligible, you may face a lifelong penalty that increases your premium.

Medicare Part C: The Alternative Choice

Medicare Part C, also known as Medicare Advantage, is a private insurance option that combines Part A and Part B coverage. These plans often include extra benefits, such as vision, hearing, dental, and sometimes even fitness memberships.

Key Features of Part C

• Covers everything Original Medicare (Parts A and B) covers

• May include additional benefits like dental, vision, and hearing coverage

• Many plans bundle prescription drug coverage (similar to Part D)

• Costs and coverage vary by plan and provider

Part C plans operate within network restrictions, meaning you may have to use specific doctors or hospitals to get the best coverage. Unlike Original Medicare, Medicare Advantage plans have an out-of-pocket maximum, protecting you from excessive costs. The specific coverage, copays, and deductibles depend on the plan you choose, making it essential to review the details carefully.

Medicare Part D: Prescription Drug Coverage

If you need prescription drug coverage, Medicare Part D is your go-to option. Part D plans are offered by private insurance companies but must follow federal guidelines.

What Part D Covers

Each plan has a formulary (list of covered drugs), but in general, Part D covers:

• Commonly prescribed brand-name and generic medications

• Different drug tiers, affecting how much you pay per prescription

• Coverage for catastrophic prescription costs after reaching a spending threshold

Out-of-Pocket Costs in 2025

• The deductible is capped at $590 for most plans.

• After reaching $2,000 in out-of-pocket drug costs, your plan covers 100% of covered medications for the rest of the year.

How the Parts of Medicare Work Together

Medicare isn’t a one-size-fits-all program. Depending on your needs, you may have just Part A and Part B, or you might enroll in a Part C or Part D plan to get additional coverage. Here’s how they fit together:

• Original Medicare (Parts A & B): Covers hospital stays and outpatient care but doesn’t include prescription drugs or extra benefits like dental or vision.

• Medicare Advantage (Part C): A bundled plan that includes everything in Parts A and B, often with added benefits.

• Part D: Works alongside Original Medicare or some Medicare Advantage plans to cover prescription drugs.

Choosing the right combination of Medicare coverage depends on your healthcare needs, budget, and preferences.

When and How to Enroll in Medicare

Knowing when to enroll in Medicare is just as important as understanding what it covers. Here’s a breakdown of the main enrollment periods:

Initial Enrollment Period (IEP)

This seven-month window starts three months before your 65th birthday, includes your birthday month, and ends three months after. Enrolling on time helps you avoid late penalties.

General Enrollment Period (GEP)

If you miss your IEP, you can sign up during the General Enrollment Period from January 1 to March 31 each year, with coverage starting on July 1.

Special Enrollment Periods (SEP)

Certain life events, such as losing employer coverage or moving, may qualify you for a Special Enrollment Period, allowing you to sign up outside of regular windows without penalties.

Open Enrollment Period

Each year from October 15 to December 7, you can change your Medicare plan, switch between Original Medicare and Medicare Advantage, or adjust your Part D coverage. Changes take effect on January 1 of the following year.

Making Sense of Your Medicare Choices

Choosing the right Medicare coverage might seem overwhelming at first, but once you break it down into its different parts, it becomes much easier to understand. Whether you’re new to Medicare or thinking about making changes to your plan, the key is to stay informed and review your options each year.

To explore your Medicare choices and find the best fit for your healthcare needs, reach out to a licensed agent listed on this website. They can walk you through the details, answer your questions, and help you enroll in a plan that works for you.