The 4 Parts of Medicare: A Simple Guide

Medicare may seem complex at first glance, but it’s built around four main parts—each designed to cover specific healthcare needs. From hospital stays to prescription drugs, understanding what each part offers can help you make informed decisions about your health coverage.

Part A – Hospital Insurance

What It Covers:

• Inpatient hospital care

• Short-term skilled nursing facility care

• Hospice services

• Some home health care

What You’ll Pay in 2025:

• Premium: $0 for most (if you or your spouse worked 10+ years)

• Deductible: $1,676 per benefit period

• Coinsurance:

  • Days 1–60: $0

  • Days 61–90: $419/day

  • Days 91+: $838/day (lifetime reserve days apply)

Why It Matters:
Part A helps protect you from major hospital bills that could otherwise lead to significant out-of-pocket costs during serious health events.

Part B – Medical Insurance

What It Covers:

• Doctor visits

• Outpatient services (labs, X-rays, surgeries)

• Preventive care (screenings, flu shots, annual wellness visits)

• Durable medical equipment (wheelchairs, walkers)

What You’ll Pay in 2025:

• Premium: Starts at $185/month (higher for higher-income individuals)

• Deductible: $257/year

• Coinsurance: Typically 20% of Medicare-approved services

Why It Matters:
Part B covers the healthcare you use most frequently—routine doctor visits, diagnostic tests, and other everyday medical services.

Part C – Medicare Advantage

What It Covers:

• Includes all services from Parts A and B

• Most plans include Part D (prescription drugs)

• Often offers additional benefits like dental, vision, hearing, and fitness memberships

What You’ll Pay in 2025:

• Premiums: Some plans start at $0/month (you must still pay your Part B premium)

• Out-of-Pocket Costs: Varies by plan; each plan must have an annual maximum

Why It Matters:
Medicare Advantage plans are private insurance alternatives to Original Medicare. They combine coverage into one plan and often include extras not available in Parts A or B.

Part D – Prescription Drug Coverage

What It Covers:

• Prescription medications

• Drugs are grouped into “tiers” (generics usually cost less)

What You’ll Pay in 2025:

• Premium: Varies by plan and location

• Deductible: Up to $590 (depending on the plan)

• Copays/Coinsurance: Based on your prescriptions and plan

• Out-of-Pocket Cap: New in 2025 – yearly out-of-pocket costs are capped at $2,000

Why It Matters:
Original Medicare doesn’t cover prescriptions. Part D helps reduce the financial burden of essential medications.

Quick Comparison: Medicare Parts at a Glance

Do You Need Every Part?

Not necessarily. The right Medicare setup depends on your health needs, budget, and preference for bundled or separate coverage:

• For basic coverage, Parts A and B (Original Medicare) may be enough.

• If you need prescription coverage, add Part D or choose a Medicare Advantage plan with drug coverage.

• If you want everything in one plan, Medicare Advantage (Part C) may be the most convenient option.