What Are the Different Parts of Medicare?

Part A is often called hospital insurance. It covers inpatient hospital stays, care in a skilled nursing facility following a qualifying hospital admission of at least three days, hospice care for those with a terminal diagnosis, and certain home health services ordered by a physician.

Most people qualify for Part A at no premium cost if they or their spouse worked and paid Medicare taxes for at least 40 quarters (10 years). Even without enough work history, Part A can be purchased at a monthly premium. Part A still comes with deductibles and coinsurance that apply to hospital stays.

Part B covers the outpatient side of your healthcare — doctor visits, preventive screenings, lab tests, imaging, mental health services, physical therapy, and durable medical equipment like wheelchairs or walkers. It also covers certain medications administered in a clinical setting, such as chemotherapy drugs.

Unlike Part A, Part B always comes with a monthly premium. The standard amount is set annually by CMS and may be higher for beneficiaries whose income exceeds certain thresholds (known as IRMAA). Part B typically pays 80% of approved costs after your annual deductible is met, leaving you responsible for the remaining 20% — with no cap.

Medicare Advantage, also called Part C, is offered by private insurance companies approved by Medicare. These plans bundle the coverage of Part A and Part B — and usually Part D — into a single plan, often with additional benefits like dental, vision, hearing, and fitness programs.

Medicare Advantage plans typically operate within networks of providers and may require prior authorization for certain services. Costs and benefits vary significantly by plan and location. While some plans have very low or $0 premiums, they often come with higher out-of-pocket costs when you actually use services. These plans are not the same as Medigap.

Part D provides coverage for prescription medications. Like Part C, Part D plans are offered by private insurance companies and must be approved by Medicare. Each plan has its own formulary — a list of covered drugs — organized into tiers that determine your cost-sharing.

Part D is optional, but delaying enrollment without other creditable drug coverage can result in a permanent late enrollment penalty. If you enroll in a Medicare Advantage plan that includes drug coverage, you don't need a separate Part D plan.

Medigap is supplemental insurance sold by private companies to fill the cost-sharing gaps left by Original Medicare — things like the Part B 20% coinsurance, hospital deductibles, and excess charges. Medigap plans are standardized and labeled by letter (Plan G, Plan N, etc.), so the benefits for each plan letter are identical regardless of which company sells it.

Medigap only works alongside Original Medicare (Parts A and B). You cannot use a Medigap plan while enrolled in a Medicare Advantage plan — they are mutually exclusive. Choosing between Medicare Advantage and Original Medicare with Medigap is one of the most consequential decisions a new Medicare beneficiary makes.