Key Takeaways

• Medicare in 2025 consists of four main parts: A, B, C, and D, each serving a distinct function. Understanding what each part covers helps you make informed decisions about your healthcare needs.

• While Parts A and B form the foundation of Original Medicare, Parts C and D provide more choice and additional benefits but may come with their own limitations and rules.

Understanding the Building Blocks of Medicare

You’ve likely heard of Medicare Parts A, B, C, and D—but what do these parts actually do for you in 2025? Medicare isn’t just one single policy; it’s a system made up of different types of coverage. Each part is designed to handle a different area of your healthcare needs, and together they form the foundation of your Medicare journey.

Let’s explore each part in detail, so you know exactly what you’re getting.

Part A: Hospital Insurance

Medicare Part A is often referred to as hospital insurance, and it typically covers:

• Inpatient hospital stays

• Skilled nursing facility care (short-term)

• Hospice care

• Some home health care

Cost Structure (2025):

• Most people don’t pay a monthly premium if they paid Medicare taxes for at least 40 quarters.

• The inpatient hospital deductible is $1,676 per benefit period.

• Daily coinsurance applies for longer hospital stays: $419 per day for days 61–90 and $838 per day for lifetime reserve days.

When It Applies:

• You’re admitted as an inpatient, not under observation status.

• You’re receiving medically necessary services approved by Medicare.

Part B: Medical Insurance

Medicare Part B covers outpatient care and physician services, which may include:

• Doctor visits

• Preventive services (screenings, vaccinations, wellness exams)

• Durable medical equipment

• Ambulance services

• Outpatient mental health care

Cost Structure (2025):

• The standard monthly premium is $185.

• The annual deductible is $257.

• After meeting the deductible, you typically pay 20% of the Medicare-approved amount for most services.

Enrollment Tip:

• If you don’t enroll during your Initial Enrollment Period, you may face a late enrollment penalty unless you qualify for a Special Enrollment Period.

Part C: Medicare Advantage

Part C refers to Medicare Advantage plans. These plans are offered by private insurers but must follow rules set by Medicare. In 2025, these plans are still popular because they often include additional benefits not available under Original Medicare.

What’s Included:

• All benefits of Parts A and B

• Often includes Part D (prescription drug coverage)

• May offer dental, vision, hearing, wellness programs, and transportation

Things to Consider:

• You must continue paying your Part B premium.

• Plans often use provider networks; out-of-network care may cost more or not be covered.

• Costs, rules, and benefits vary significantly by plan and location.

Enrollment Periods:

• Annual Enrollment: October 15 to December 7

• Medicare Advantage Open Enrollment: January 1 to March 31 (for switching between Advantage plans or returning to Original Medicare)

Part D: Prescription Drug Coverage

Medicare Part D covers prescription medications. These plans are also offered by private companies approved by Medicare.

What’s Covered:

• Generic and brand-name drugs

• Medications in different tiers, with varying copayment levels

Cost Structure (2025):

• Maximum deductible is $590.

• After meeting the deductible, you pay a share of the drug costs through copayments or coinsurance.

• Out-of-pocket costs are now capped at $2,000 per year, a major shift from 2024.

New for 2025:

• Once you hit the $2,000 cap, your plan covers all drug costs for the rest of the year.

• The new Medicare Prescription Payment Plan allows you to spread drug costs over the year with monthly payments.

How the Parts Work Together

Knowing how the parts interact can help you avoid coverage gaps:

• Parts A + B: Form the base of Original Medicare. You can add a standalone Part D plan for prescriptions.

• Part C: Bundles A, B, and usually D, with extras.

• Part D: Can be added to Original Medicare or certain Medicare Advantage plans that don’t include drug coverage.

You can’t be enrolled in both a Medicare Advantage plan and a standalone Part D plan at the same time, unless your plan is structured to allow it.

Enrollment Windows You Can’t Miss

Understanding the timing is just as important as understanding the parts themselves. Here are the main enrollment periods in 2025:

• Initial Enrollment Period (IEP): Begins 3 months before, includes the month of, and extends 3 months after your 65th birthday.

• General Enrollment Period (GEP): January 1 to March 31 each year, if you missed IEP. Coverage starts July 1.

• Annual Enrollment Period (AEP): October 15 to December 7, for making changes.

• Medicare Advantage Open Enrollment Period (MA OEP): January 1 to March 31, for switching Advantage plans or returning to Original Medicare.

• Special Enrollment Periods (SEPs): Triggered by events like losing other insurance, moving, or gaining Medicaid eligibility.

Missing your enrollment window can mean late penalties and delayed coverage, so it’s essential to plan ahead.

What Medicare Doesn’t Cover

Despite the range of services Medicare includes, some gaps remain:

• Long-term care (custodial care)

• Most dental care

• Eye exams related to prescription glasses

• Hearing aids and exams

• Cosmetic procedures

• Routine foot care (unless medically necessary)

For these, you may consider separate supplemental insurance or Medicare Advantage plans that include limited coverage.

Supplemental Coverage: Medigap

If you stay with Original Medicare (Parts A and B), you can buy a Medigap policy. Medigap plans help cover your share of the costs:

• Coinsurance

• Copayments

• Deductibles

Important: Medigap plans do not include prescription drug coverage. You would still need a separate Part D plan for medications.

Eligibility Note:

• You must have Part A and Part B to buy a Medigap plan.

• If you’re in a Medicare Advantage plan, you can’t use a Medigap policy.

Making the Right Choice for Your Situation

Your Medicare decision should reflect your health status, budget, and preferences. Here are some questions to guide you:

• Do you need predictable out-of-pocket costs?

• Do you prefer broad access to providers, or are you okay with networks?

• Are you managing chronic conditions or taking expensive medications?

• Do you value extra benefits like dental and vision?

Answering these questions can help you decide whether Original Medicare with a Medigap plan or a Medicare Advantage plan makes more sense for you.

Getting the Most from Medicare in 2025

Understanding what Medicare’s different parts do for you is the first step toward making the system work for your needs. Each part plays a role, and putting them together strategically gives you more control, better protection, and potentially lower costs in the long run.

To explore your options further, speak with a licensed insurance agent listed on this website. They can help you compare plans, understand your costs, and avoid common enrollment mistakes.