Medicare Parts A, B, C, and D Explained: What’s the Difference?
If you’ve ever tried to understand Medicare, you’ve probably noticed how confusing it can be. Between Parts A, B, C, and D, it almost feels like trying to solve a puzzle without the picture on the box.
Medicare is a federal health insurance program primarily for people aged 65 and older, as well as some younger individuals with disabilities. It helps cover a wide range of medical services, from hospital stays to doctor visits and prescription drugs.
What distinguishes each of those components, though? Medicare Parts A, B, C, and D will all be broken down in this book so you can fully understand what they cover, how much they cost, and how to select the best plan for your requirements.
What Is Medicare?
Medicare is a U.S. federal health insurance program that was established in 1965 to help older Americans and certain individuals with disabilities get affordable access to healthcare. It’s managed by the Centers for Medicare & Medicaid Services (CMS) and funded through payroll taxes, premiums, and government funds.
There are several parts of Medicare, each covering different types of services. you can choose the parts that best fit your health needs and budget.
Here’s a quick overview:
- Part A: Hospital insurance
- Part B: Medical insurance
- Part C: Medicare Advantage (private insurance option)
- Part D: Prescription drug coverage
Medicare Part A - Hospital Insurance
The cost of inpatient hospital care is partially covered by Medicare Part A. This covers hospital stays, care in skilled nursing facilities, hospice care, and certain home healthcare services.
1. What It Covers
- Inpatient care in hospitals
- Skilled nursing facility (after a qualifying hospital stay)
- Hospice care for terminally ill patients
- Limited home healthcare services
2. What It Costs
For most people, Part A is premium-free, meaning you don’t pay a monthly premium if you or your spouse paid Medicare taxes for at least 10 years.
However, there are deductibles and coinsurance for each benefit period.
3. When to Enroll
Most people are automatically enrolled in Part A at age 65, especially if they’re already receiving Social Security benefits.
Medicare Part B - Medical Insurance
Medicare Part B covers outpatient and medical services that aren’t included under Part A. It’s what you use for routine doctor visits, preventive screenings, lab tests, and durable medical equipment.
1. What It Covers
- Doctor’s services and outpatient care
- Preventive care (flu shots, cancer screenings, etc.)
- Mental health services
- Durable medical equipment (wheelchairs, walkers, etc.)
2. What It Costs
Part B always has a monthly premium, in contrast to Part A.
In 2025, the standard premium is around $174.70 per month (though this can vary by income). You’ll also pay a small deductible and typically 20% coinsurance for covered services.
3. Why It Matters
Most people have both Part A and Part B, which together are called Original Medicare. This combination covers most basic healthcare needs, but not everything (for example, dental, vision, and hearing are not included).
Medicare Part C - Medicare Advantage
Medicare Part C, also known as Medicare Advantage, is an alternative to Original Medicare. It’s offered by private insurance companies that are approved by Medicare.
You still receive all of your Part A and Part B coverage when you sign up for a Medicare Advantage plan, but you frequently receive additional benefits.
1. What It Covers
Everything included in Part A and B
Most plans include prescription drug coverage (Part D)
Extra advantages including exercise programs, dental care, eye care, and hearing
2. How It Works
You’ll usually have to use doctors and hospitals within the plan’s network (similar to an HMO or PPO).
These plans often have an annual out-of-pocket maximum, which can help protect you from very high medical costs.
3. Pros and Cons
Pros:
- Extra benefits (like dental or vision)
- Simpler, all-in-one coverage
- Out-of-pocket cost limits
Cons:
- Limited provider networks
- May require referrals or pre-authorization
- Varies by location and insurer
Medicare Part D - Prescription Drug Coverage
Prescription drugs can be one of the biggest healthcare expenses for seniors, which is where Medicare Part D comes in.
1. What It Covers
Part D helps pay for prescription medications. Each plan has its own list of covered drugs, called a formulary, which is divided into pricing “tiers.”
2. How It Works
- There are two ways to obtain Part D:
- To your Original Medicare (Parts A & B), add a stand-alone prescription plan, or
- Sign up for a Medicare Advantage plan that covers prescription drugs.
3. What It Costs
You’ll pay a monthly premium, plus a copayment or coinsurance for each prescription. The exact amount depends on your plan and the type of medication.
Tip: You could have to pay a late enrollment penalty if you don't enroll in Part D when you're initially eligible and don't have any other prescription coverage.
Comparing Medicare Parts A, B, C, and D
Medicare Part A is the foundation of the program. It covers inpatient hospital care, stays in a skilled nursing facility, hospice care, and certain home health services. Most people don’t pay a monthly premium for Part A because they’ve already contributed through payroll taxes during their working years. However, there are still deductibles and coinsurance you’ll need to pay when you use hospital services.
Medicare Part B, on the other hand, covers outpatient and medical services. This includes doctor visits, preventive screenings, lab work, and medical equipment. Unlike Part A, Part B always requires a monthly premium, and you’ll usually share costs through deductibles and 20% coinsurance. Together, Parts A and B make up what’s known as Original Medicare, offering broad access to healthcare providers across the U.S.
Medicare Part C, or Medicare Advantage, works differently. Instead of using Original Medicare directly, you enroll in a private insurance plan that’s approved by Medicare. These plans combine Part A and Part B coverage, and many include Part D (prescription drugs) as well. Medicare Advantage often adds extra benefits like vision, dental, hearing, or wellness programs. However, you’ll typically need to use doctors and hospitals within your plan’s network, and costs can vary depending on the provider and location.
Finally, Medicare Part D provides prescription drug coverage. You can add it to Original Medicare as a separate plan or get it included in your Medicare Advantage plan. Each Part D plan has its own list of covered medications (called a formulary) and its own premium, deductible, and copayment rules.
In short, you can think of Medicare like this:
- Part A covers hospital care.
- Part B covers outpatient and doctor services.
- Part C combines A and B (and sometimes D) through private insurers.
- Part D helps pay for prescription drugs.
If you prefer flexibility and don’t mind handling separate plans, Original Medicare (Parts A + B + D) might be best. But if you’d rather have all-in-one coverage with extra perks, a Medicare Advantage plan (Part C) could be the smarter choice.
How to Choose the Right Medicare Plan
Choosing a Medicare plan isn’t just about cost, it’s about finding the right fit for your health and lifestyle.
Here are a few key factors to consider:
- Your Health Needs: Do you visit doctors frequently or take regular medications?
- Your Budget: Compare monthly premiums, deductibles, and out-of-pocket limits.
- Your Preferred Doctors: Check if they’re in-network for Medicare Advantage plans.
- Extra Benefits: Do you need dental or vision coverage?
- Location: Plan availability and pricing can vary by state and county.
Conclusion
Understanding Medicare doesn’t have to be overwhelming. Once you know what each part covers, it’s much easier to make informed decisions.
To recap:
- Part A covers hospital care.
- Part B covers outpatient and medical services.
- Part C (Medicare Advantage) combines A and B, often with extra benefits.
- Part D covers prescription drugs.
Take time to review your health needs and compare available plans each year, because the best Medicare plan is the one that fits you.