What Medicare Parts A, B, C, and D Actually Cover

The four parts of Medicare do different jobs, and most people need more than one

Part A covers hospital stays, skilled nursing care after a hospital stay, hospice, and some home health services. Part B covers doctor visits, outpatient care, lab tests, and medical equipment. Part C (Medicare Advantage) is an alternative to Parts A and B — a private insurance plan that covers everything A and B do, usually with lower out-of-pocket costs but a smaller network of doctors. Part D covers prescription drugs and is separate from the other three.

Most people on Medicare have Part A automatically when they turn 65. Part B is optional but recommended — you pay a monthly premium for it. Part C and Part D are also optional, but if you don't sign up when you're first may be able to access, you'll pay a penalty for each month you delay. The penalty is permanent, even if you sign up later.

Which parts you need depends on whether you want traditional Medicare (Parts A and B plus Part D) or a Medicare Advantage plan (Part C, which includes drug coverage). You cannot have both Part C and Parts A and B at the same time.

Key Takeaways

• Part A covers hospital and skilled nursing stays; Part B covers doctor visits and outpatient care; Part C is a private alternative to A and B; Part D covers prescription drugs.
• Most people get Part A automatically at 65, but you must actively sign up for Part B, and delaying either one costs you a permanent penalty.
• Part C (Medicare Advantage) bundles hospital, doctor, and drug coverage into one plan with a network of doctors, while traditional Medicare (A, B, and D) lets you see any doctor who accepts Medicare.
• If you choose traditional Medicare, you must also sign up for Part D during your enrollment window or pay a penalty each month you go without it.
• Your costs differ sharply between traditional Medicare and Advantage plans — Advantage has lower premiums but higher per-visit costs, while traditional Medicare has higher premiums but more flexibility.

Part A: Hospital and skilled nursing care

Part A pays for inpatient hospital stays (meaning you stay overnight), skilled nursing facility stays after a hospital stay, hospice care, and some home health services. It does not cover outpatient care, doctor visits, or long-term custodial care in a nursing home.

Most people do not pay a monthly premium for Part A if they or their spouse paid Medicare taxes for at least 10 years while working. If you don't meet that requirement, you can buy Part A, and the premium varies based on how many years you worked.

When you use Part A, you pay a deductible — a flat amount you cover before Medicare starts paying. For hospital stays in 2024, that deductible is $1,632 per benefit period (the deductible amount changes each year). After you meet the deductible, Medicare covers most of the cost, though you may pay coinsurance (a percentage of the cost) for stays longer than 60 days.

Part B: Doctor visits and outpatient services

Part B covers doctor visits, preventive care (like annual wellness exams and screenings), outpatient surgery, lab tests, imaging, mental health services, and durable medical equipment like wheelchairs or oxygen. It does not cover routine dental, vision, or hearing care.

Part B requires a monthly premium, which is income-based — higher earners pay more. In 2024, the standard premium is $164.90 per month, but you may pay between $134.90 and $560.50 depending on your income from two years prior. You also pay an annual deductible (currently $240) and then 20 percent coinsurance for most services after that.

You must sign up for Part B during your initial enrollment window (the three months before and after you turn 65) or when you first become may be able to access. If you delay and don't have other may have access to coverage, you'll pay a 10 percent penalty on your Part B premium for each year you didn't have it — and that penalty is permanent.

Part C: Medicare Advantage as an alternative to traditional Medicare

Part C, also called Medicare Advantage, is a private insurance plan that bundles Part A, Part B, and usually Part D (drug coverage) into one plan. Instead of going to any doctor who accepts Medicare, you choose a plan with a network of doctors and hospitals. If you go outside the network, you pay more or the plan doesn't cover it (except in emergencies).

Medicare Advantage plans often have lower or zero monthly premiums and lower out-of-pocket maximums than traditional Medicare. However, you typically pay a copay or coinsurance at each doctor visit, and you may need prior authorization from the plan before certain procedures. Plans vary widely in what they cover beyond the basics — some include dental, vision, or fitness benefits.

You cannot have Part C and Parts A and B at the same time. If you switch from Advantage to traditional Medicare, you have a limited window to do so without a penalty. If you switch from traditional Medicare to Advantage, you can do so during the annual enrollment period (October 15 to December 7) with no penalty.

Part D: Prescription drug coverage

Part D covers prescription medications. If you have traditional Medicare (Parts A and B), you must sign up for Part D separately through a private insurance company. If you have Medicare Advantage, drug coverage is usually included, though you may have a separate premium for it.

Part D plans vary in which drugs they cover and how much you pay. Most plans have a monthly premium, an annual deductible, and then a tiered system where you pay different amounts depending on the drug's tier (generic, preferred brand, non-preferred brand, or specialty). After you and the plan spend a certain amount out-of-pocket, you enter the "donut hole" — a coverage gap where you pay more. Once you reach the out-of-pocket maximum, the plan covers most of the cost.

You must sign up for Part D when you first become may be able to access or during the annual enrollment period. If you go without Part D coverage for more than 63 days and then sign up later, you'll pay a penalty for each month you were uninsured — and like Part B, that penalty is permanent.

Traditional Medicare versus Medicare Advantage: what the costs actually look like

With traditional Medicare (Parts A, B, and D), you pay monthly premiums for Part B and Part D, an annual deductible for Part B, and then 20 percent coinsurance for most services. You can see any doctor or hospital that accepts Medicare, and there's no network restriction. Your total costs depend on how much care you use.

With Medicare Advantage, you typically pay a lower or zero monthly premium, but you pay a copay or coinsurance at each visit — often $20 to $50 per doctor visit. You're limited to in-network providers (except emergencies), and you may need the plan's permission before certain procedures. Most Advantage plans have an out-of-pocket maximum, meaning your costs stop once you've spent a certain amount in a year.

Neither option is universally cheaper. Advantage plans work well if you see doctors frequently and want predictable costs. Traditional Medicare works well if you see specialists, travel, or want maximum flexibility in choosing providers. The best choice depends on your health, your doctors, and how much care you expect to use.

When and how to sign up

Your initial enrollment window is the three months before you turn 65, the month you turn 65, and the three months after. If you miss this window and don't have other may have access to coverage, you'll pay a permanent penalty on Part B and Part D premiums.

If you're still working and have health insurance through your employer, you may be able to delay Part B without a penalty — but you must sign up within eight months of losing that coverage. If you delay Part D, there's no exception: you'll pay a penalty unless you had other drug coverage.

You can sign up through Medicare.gov, by phone at 1-800-MEDICARE, or in person at your local Social Security office. If you're choosing Medicare Advantage or Part D, you'll sign up through the plan itself during the annual enrollment period (October 15 to December 7) or your initial enrollment window.

Frequently Asked Questions

Do I have to take Part A when I turn 65?

Part A is automatic if you're receiving Social Security benefits or railroad retirement benefits. If you're not yet receiving benefits, you should sign up during your initial enrollment window to avoid delays. You can decline Part A, but if you change your mind later, you may face a penalty.

What happens if I miss my enrollment window?

If you miss your initial enrollment window and don't have other may have access to coverage, you'll pay a permanent 10 percent penalty on your Part B premium for each year you didn't have it, and a similar penalty on Part D. The penalty is added to your premium for as long as you have Medicare. The only exception is if you were still working with employer coverage — you have eight months after losing that coverage to sign up without penalty.

Can I switch between traditional Medicare and Medicare Advantage?

Yes. If you're on Advantage and want to switch to traditional Medicare, you have a limited window (usually January 1 to February 14). If you're on traditional Medicare and want to switch to Advantage, you can do so during the annual enrollment period (October 15 to December 7). Outside these windows, you're locked into your current choice until the next enrollment period.

Do I need all four parts?

No. You need either Parts A and B (traditional Medicare) or Part C (Advantage). If you choose traditional Medicare, you should also sign up for Part D unless you have other drug coverage. If you choose Advantage, drug coverage is usually included. You cannot have both traditional Medicare and Advantage at the same time.

What if I can't afford the premiums?

If your income is low, you may may have access to for programs that help pay Medicare premiums and cost-sharing. These include the Medicare Savings Program (which pays Part B and Part D premiums) and Extra Help (which helps with Part D costs). Contact your state Medicaid office or call 1-800-MEDICARE to learn whether you may have access to.