Key Takeaways

• Medicare consists of four core parts (A, B, C, and D), but they often overlap, exclude, or conflict in ways that surprise many beneficiaries.

• Understanding when each part applies and what each one omits can help you avoid costly gaps, delays, and duplicate coverage.

Medicare Isn’t Just Four Parts—It’s Four Systems With Their Own Rules

At first glance, Medicare seems straightforward: hospital coverage, medical coverage, private alternatives, and prescription drugs. But when you take a closer look at how Parts A, B, C, and D actually function together—or don’t—the simplicity starts to unravel.

Each part has its own rules, enrollment windows, networks (or lack of them), cost structures, and exceptions. They were created at different times, for different reasons, and they aren’t always compatible. That’s why understanding the details is essential to make your Medicare coverage work the way you expect it to.

Part A Isn’t Free for Everyone—and It’s Not Unlimited Either

Part A is known as hospital insurance. Many people assume it comes without cost, but that’s only true if you (or your spouse) worked and paid Medicare taxes for at least 40 quarters (10 years). If not, you may pay up to $518 per month in 2025.

And even when you qualify for premium-free Part A, you’re not exempt from out-of-pocket costs:

• Inpatient hospital deductible: $1,676 per benefit period

• Daily coinsurance after 60 days: $419 per day (days 61-90)

• Lifetime reserve days: $838 per day after day 90

• Skilled nursing facility coinsurance: $209.50 per day (days 21-100)

Also, coverage is limited by benefit periods. Each period resets after you’ve been out of the hospital for 60 days, potentially triggering another deductible.

Part B Is Optional—But Skipping It Can Cost You Later

Part B covers outpatient care, doctor visits, preventive services, and durable medical equipment. It’s optional, but declining it without other credible coverage could leave you with a lifelong late enrollment penalty—10% added to your premium for each 12-month period you delay.

In 2025:

• Standard Part B premium: $185 per month

• Annual deductible: $257

• Coinsurance: Typically 20% after deductible, with no out-of-pocket cap

If you’re enrolled in a Medicare Advantage plan, you still have to pay the Part B premium. And if you re-enroll later, penalties may apply unless you qualify for a Special Enrollment Period.

Part C Combines Benefits—But May Limit Your Freedom

Part C, also known as Medicare Advantage, bundles Part A, Part B, and usually Part D. While this can simplify your experience, it comes with important trade-offs:

• You’re required to use a provider network, usually through HMOs or PPOs.

• Referrals may be needed to see specialists.

• Plans often have their own deductibles and copays, which differ from Original Medicare.

• Benefits may include extra services like dental or vision, but those vary widely.

You cannot use a Medicare Supplement (Medigap) policy with a Part C plan. That means you absorb all cost-sharing set by the plan itself.

Part D Covers Prescriptions—but Only Through Standalone or MA Plans

Part D is prescription drug coverage. If you’re on Original Medicare, you’ll need a standalone Part D plan. If you’re enrolled in a Medicare Advantage plan, drug coverage is often included.

In 2025, drug coverage has changed significantly:

• Out-of-pocket cap: Now capped at $2,000 annually.

• Deductible: Up to $590

• Catastrophic phase: Once you hit $2,000 in out-of-pocket costs, your plan pays 100% for the rest of the year.

But coverage varies by formulary, tier, and network pharmacy, and switching plans is restricted to the Annual Enrollment Period (October 15 to December 7).

Some Benefits Just Don’t Fit Into Any Medicare Part

While Medicare covers many healthcare services, some essential needs don’t fall under any part:

• Long-term custodial care is not covered

• Routine dental, hearing, and vision are generally excluded from Original Medicare

• Over-the-counter drugs and supplies are not included

• Foreign travel emergencies are rarely covered

To address these, many people purchase additional coverage—but timing matters. Medigap enrollment rights are strongest during your Initial Enrollment Period or a Special Enrollment Period, and after that, medical underwriting could apply.

Medicare Enrollment Windows Don’t Always Align With Your Needs

The Initial Enrollment Period (IEP) lasts for seven months around your 65th birthday (three months before, the month of, and three months after). If you miss it, you might need to wait until the General Enrollment Period (January 1 to March 31), with coverage starting in July and possible penalties.

Each year, other periods affect your choices:

• Annual Enrollment Period (Oct 15 – Dec 7): Switch plans, join or drop Part D

• Medicare Advantage Open Enrollment (Jan 1 – Mar 31): Switch MA plans or return to Original Medicare

• Special Enrollment Periods (SEPs): Triggered by qualifying events like losing employer coverage or moving

These windows apply differently to each part—yet another layer of complexity.

Coordination with Employer Insurance Can Get Tricky

If you’re still working at age 65, you may keep your employer coverage and delay Parts B and D without penalty—if the plan qualifies as creditable. But you must verify this in writing.

If your employer has fewer than 20 employees, Medicare usually becomes your primary coverage. In those cases, delaying enrollment could leave gaps.

And once you retire, you must act quickly. Special Enrollment Periods typically last 8 months from the end of employment or coverage, but delays can leave you without drug coverage or subject to penalties.

Medicare Doesn’t Automatically Include Supplement Insurance

Many people believe Medicare includes some form of supplemental protection against out-of-pocket costs. It doesn’t.

If you want help with coinsurance, deductibles, or costs from extended hospital stays, you need to purchase a Medigap plan. These are private policies that pair only with Original Medicare—not with Medicare Advantage.

Medigap enrollment is easiest during your Medigap Open Enrollment Period: the six months starting the month you’re 65 or older and enrolled in Part B. After that, insurers may deny coverage or charge more based on health conditions.

Switching Isn’t Always Simple or Reversible

People often assume they can move freely between Medicare Advantage and Original Medicare. While you can switch, your options are restricted by timing—and in some cases, health status.

If you leave Medicare Advantage and return to Original Medicare outside of certain windows, you may not be able to get a Medigap policy. That’s because guaranteed issue rights don’t apply year-round.

And if you drop drug coverage, you’ll owe a penalty unless you have other credible coverage.

What to Know Before Relying on a Medicare Advantage Plan

In 2025, Medicare Advantage plans continue to offer popular perks like dental, hearing, or fitness benefits. But:

• These benefits are not standardized across plans.

• Provider networks can be limited and change at any time.

• Prior authorizations and service caps may restrict your care.

• Out-of-pocket maximums are higher than many expect—up to $9,350 for in-network care.

And once you’re in a Medicare Advantage plan, switching to Original Medicare with Medigap coverage might not be guaranteed unless you’re within trial rights.

How to Make Medicare Work Without Surprises

Medicare is not designed to be flexible. That’s why planning ahead is so important. The pieces don’t always fit neatly together, and small choices at enrollment can have lasting effects.

Here’s what helps:

• Understand your enrollment timelines and mark them on a calendar.

• Compare plan benefits and networks, especially with Medicare Advantage.

• Factor in all costs—premiums, deductibles, copays, and what’s not covered.

• Get written proof of creditable coverage if you’re delaying Parts B or D.

• Consider Medigap early, before underwriting becomes an issue.

Medicare’s Moving Parts Require Careful Planning

Medicare can provide strong protection—but only if you understand where its parts align and where they don’t. Mistakes in timing, assumptions about what’s covered, or switching without realizing the consequences can cost you more than you expect.

If you want help evaluating your options or avoiding penalties and gaps, connect with a licensed insurance agent listed on this website for personalized support.