What Are the Parts of Medicare? (A, B, C, D)

Learn the basics of the various Medicare coverage options.

Understanding the distinction between the several parts of Medicare coverage can be a challenge for anyone, whether you’re brand new to Medicare or a current beneficiary.

In general, these different Medicare parts are responsible for covering different services and care. This allows beneficiaries some flexibility to prioritize coverage areas that are important to them.

So, let’s dig into the specifics of these Medicare parts, beginning with the basics.

There are four parts of Medicare coverage: Part A, Part B, Part C, and Part D.

Part A is known as your inpatient hospital coverage and Part B is known as your outpatient medical coverage. These two parts make up what is known as Original Medicare coverage.

Part C is more commonly known as Medicare Advantage and offered by Medicare-approved private insurance companies. These plans provide the full coverage of Original Medicare (Parts A and B) and often include prescription drug coverage and other additional benefits.

Part D provides prescription drug coverage and can be added to your Original Medicare coverage. In order to purchase Part D coverage, you must be enrolled in Part A or Part B (or both).

Another aspect of Medicare coverage is Medicare Supplement Insurance, also known as Medigap. These plans are used to supplement, or cover gaps in, your Original Medicare coverage and are only available for purchase through private insurance providers.

Now, let’s take a further look at the eligibility, enrollment, and coverage of each of these parts.

Medicare Part A

Part A is known as your hospital insurance. It’s one of two parts that make up Original Medicare, which is the basic coverage provided through enrollment.

Part A helps to cover costs for inpatient care in a hospital and skilled nursing facility, as well as home health care and hospice care services.

Most individuals are eligible for Part A once they reach the age of 65. Some are eligible for Medicare before turning 65, such as in the case of disability or End-Stage Renal Disease.

If you’re already receiving retirement or disability benefits, you are likely eligible for Medicare Part A.

Most commonly, people do not have to pay a monthly premium for Part A.

For a complete look at Part A, read our Comprehensive Guide to Medicare Part A.

Medicare Part B

Part B is known as your medical insurance. It’s the second part of Original Medicare coverage.

Part B helps to cover costs for medical services that extend beyond inpatient treatment, such as medically necessary services and preventive services.

While it is part of Original Medicare, enrollment is optional. Some individuals choose to defer enrollment if they’re working past the age of 65, though Part B can be used in coordination with employer coverage, as well.

If you’re eligible for Medicare Part A, then you are also eligible to enroll in Part B coverage.

So, just as with Part A eligibility, most are eligible at the age of 65. The same conditions apply for earlier enrollment in the case of disability or End-Stage Renal Disease.

Part B Monthly Premium Amount: $170.10 (standard for 2022).

Your premium amount is based on your annual income, so if your income exceeds $91,000 ($182,000 for married couples), then your premium will be higher.

Part B Deductible Amount: $233 (2022).

Once you’ve met this amount you will pay 20% of the Part B covered services.

For a complete look at Part B, read our Comprehensive Guide to Medicare Part B.

Medicare Part C (Medicare Advantage)

Medicare Part C, also referred to as Medicare Advantage, is a health insurance plan offered by Medicare-approved private insurance companies.

Medicare Advantage plans provide the full coverage of Medicare Parts A and B, and often times Part D (prescription drug coverage), as well.

In addition to this coverage, Medicare Advantage plans typically offer extra benefits like dental, vision, hearing, and wellness programs.

Medicare Advantage plan costs often differ from plan to plan. This is due to the variety of benefits that a plan can offer and the private companies that offer them.

The majority of plans charge a monthly premium that is in addition to your Medicare Part B premium.

All Medicare Advantage plans must cap out-of-pocket costs. The out-of-pocket cost limit is no more than $7,550 (2022). It’s common for plans to cap below this limit, however.

Note that this does not include prescription out-of-pocket costs.

If you’re interested in adding additional coverage with a Medicare Advantage plan, you cannot add other supplemental coverage options, such as a Medicare Part D prescription drug plan or Medigap plan.

For a complete look at Part C, read our Comprehensive Guide to Medicare Advantage.

Medicare Part D

Medicare Part D provides beneficiaries with prescription drug coverage at more affordable rates.

If you’re eligible for Original Medicare, then you are also eligible for Medicare Part D coverage.

In order to purchase a Medicare Part D plan, you must be enrolled in either Medicare Part A or Part B (or both).

Part D plans are offered by Medicare-approved private insurance companies and vary in their coverage from plan to plan.

Drug plans typically have a list of the drugs they cover, known as a formulary. Each plan chooses which covered Part D drugs will make up their formulary.

For 2022, the Part D standard deductible is $480. The threshold of spending at which you enter the coverage gap is $4,430. The threshold for catastrophic coverage is $7,050.

When you enter the coverage gap, you will not have to pay more than 25% of your plan’s cost for covered brand-name prescription drugs or generic drugs.

For a complete look at Part D, read our Comprehensive Guide to Medicare Part D.

Medicare Supplement (Medigap)

A Medigap plan, or Medicare Supplement plan, is an insurance policy that allows individuals to add additional coverage to their Original Medicare.

While Original Medicare offers broad coverage to a variety of people, Medigap plans allow more specificity of coverage to meet individual needs: lifestyle considerations, financial goals, healthcare requirements, personal priorities, and more.

If you would like to purchase a Medicare supplement, you must first enroll in Medicare Parts A and B (Original Medicare). You cannot purchase a Medigap plan if you already have a Medicare Advantage plan (unless if you are switching back to Original Medicare).

All Medigap plans are required by law to cover certain benefits and insurance companies are only allowed to sell you these standardized plans.

While there are baseline requirements, your Medigap plan may go above and beyond. Different plans offer different amounts in coverage.

Medigap plans are only available through private insurance providers. Different providers may charge varying premium amounts for the same policy. Your plan’s monthly premium will also vary depending on the amount of coverage that you choose.

For a complete look at Medicare Supplement Insurance, read our Comprehensive Guide to Medigap.

Understanding the distinction between these different parts of Medicare and the coverage provided by each will assist you when it comes to choosing your own insurance.

As we’ve outlined here, the coverage you choose and the provider you receive that coverage from can impact your out-of-pockets costs and where you are able to receive care.