Medicare Parts A, B, C, and D Explained

Medicare is a federal health insurance program for people 65 and older, plus younger people with qualifying disabilities. You also need to be a US citizen or a legal resident who has lived here for at least five years in a row before enrolling. Watch the intro at 1:00. One thing surprises a lot of new enrollees: Medicare is individual insurance. Every person enrolls and chooses coverage on their own, even if you spent decades on a family plan through an employer. There is no spouse-and-dependent option here.

Part A covers inpatient care. That means hospital stays, skilled nursing facility care, your room, meals, nursing services, equipment used in your care, the operating room - anything you receive while you are admitted. Watch at 2:25. For most people Part A is premium-free because you or your spouse paid Medicare taxes for at least 10 years. You still pay a deductible and some copays or coinsurance when you actually use Part A services, but you do not pay a monthly bill for the coverage itself.

Part B covers doctor visits, outpatient care, ambulance services, preventive care like flu shots, and durable medical equipment such as a wheelchair you use at home. Watch at 2:38. Unlike Part A, Part B has a monthly premium that gets deducted from your Social Security check (or billed directly if you have not started Social Security yet). The standard premium is income-adjusted, so high earners pay an IRMAA surcharge. For most services you pay 20% coinsurance and Medicare pays 80% of the Medicare-approved amount, plus an annual deductible. There is no out-of-pocket cap under Original Medicare alone - which is the main reason most people pair Part B with either a Medigap plan or a Medicare Advantage plan.

Part C is Medicare Advantage. These are bundled plans sold by private insurance companies (often HMOs or PPOs) that replace Original Medicare and cover everything Parts A and B cover, usually with prescription drug coverage and extras like dental, vision, and hearing rolled in. Watch at 5:10. Premiums vary by plan, and some plans have a $0 premium. The big built-in protection: every Medicare Advantage plan must set an annual out-of-pocket maximum, so once you hit that cap the plan pays 100% for the rest of the year. The catch is the network. Most Advantage plans require you to use in-network doctors and pharmacies to get the best price.

Part D pays for prescription drugs. You can get it two ways: built into a Medicare Advantage plan (Part C), or as a standalone Part D plan you add on top of Original Medicare. Watch at 6:45. Every Part D plan has a formulary - a list of covered drugs grouped into tiers. Lower tiers (generics) cost you the least at the pharmacy counter. Higher tiers (brand-name and specialty drugs) cost more. Most plans also have a pharmacy network, and filling prescriptions inside the network gets you the best price. The coverage gap (often called the donut hole) has been reformed under the Inflation Reduction Act, and starting in 2025 there is a hard $2,000 annual out-of-pocket cap on Part D drug costs.

The pieces fit together in two main shapes. Option one: keep Original Medicare (Part A + Part B), then add a Part D drug plan and optionally a Medigap supplement to cap your out-of-pocket spending. Option two: replace Original Medicare with a Medicare Advantage plan (Part C) that bundles everything in one. Watch at 9:15. Timing matters as much as the parts themselves. Your Initial Enrollment Period (IEP) is a seven-month window around your 65th birthday. Missed it without other coverage? The General Enrollment Period (GEP) runs January 1 through March 31 each year. The Annual Election Period (AEP) is October 15 through December 7 and is when you can switch Part D or Medicare Advantage plans. Special Enrollment Periods (SEP) open up after qualifying life events like losing employer coverage or moving.

You do not have to figure this out alone. Watch the closing thought at 10:40. Three free, reliable sources of personalized Medicare help: call 1-800-MEDICARE (1-800-633-4227) to talk to a Medicare representative 24/7. Contact your State Health Insurance Assistance Program (SHIP) for unbiased local counseling at shiphelp.org. Or work with a licensed independent Medicare broker who represents multiple carriers (their commission is paid by the insurance company, so the comparison is free to you). For the official rules and current premium amounts, the source of truth is Medicare.gov. For Social Security and IRMAA questions, use SSA.gov. For coverage policy and appeals, see CMS.gov.