Medicare Parts A, B, C and D, explained properly

Medicare's structure makes sense once you know it was assembled in pieces over sixty years rather than designed in one sitting. Parts A and B arrived together in 1965. Part C came in the 1990s as a private alternative. Part D was added in 2006 because the original programme, remarkably, didn't cover prescriptions.

So the letters aren't a sequence. They're a pile. Here's each one, and then the part that actually matters: what falls between them.

Part A covers care you receive as an admitted inpatient, plus a few things that follow from it:

• Inpatient hospital stays — the room, nursing, meals, drugs administered during the stay.
• Skilled nursing facility care, short-term only, and only after a qualifying inpatient hospital stay.
• Hospice care for someone with a terminal prognosis.
• Some home health care, when it's skilled and intermittent.
• Inpatient rehabilitation.

Most people pay no premium for Part A, because they or a spouse paid Medicare taxes for at least ten years. It isn't free, though — there's a deductible per benefit period, and daily coinsurance kicks in on long stays.

Part B is where most of ordinary medical life happens:

• Doctor visits, specialist visits, and most outpatient care.
• Lab work, imaging, and diagnostic tests.
• Preventive services — the annual wellness visit, most screenings, most vaccines.
• Durable medical equipment: walkers, wheelchairs, oxygen, hospital beds.
• Outpatient mental health care.
• Ambulance transport when medically necessary.
• Care coordination and navigation services, including the PIN and CHI benefits.
• Some drugs administered in a clinical setting, such as chemotherapy infusions.

Part B has a monthly premium, usually deducted from a Social Security payment, and higher earners pay a surcharge based on tax returns from two years prior. After an annual deductible, Medicare pays 80% of the approved amount and you owe 20%.

That 20% is the number to sit with. It has no ceiling. Twenty percent of a routine office visit is trivial; twenty percent of a year of cancer infusions is not. Original Medicare, by itself, has no out-of-pocket maximum — which is the single most important thing to understand about it.

Everyone with Medicare makes one structural choice, and it shapes everything afterward.

Neither is right for everyone, which is why both exist. The full comparison, including the timing trap that catches people who want to switch back later, is its own guide.

A Medicare Advantage plan is a private insurance plan that Medicare pays to deliver your Part A and Part B benefits. You keep paying the Part B premium; the plan often charges little or nothing on top. In exchange, you use its network and follow its rules.

The appeal is real: an out-of-pocket maximum, bundled drug coverage, and extras Original Medicare doesn't touch — dental, vision, hearing aids, gym memberships, sometimes transportation or grocery allowances. The trade is narrower provider choice, prior authorization, and coverage that can look very different if you get seriously ill or travel.

Part D is prescription drug coverage, sold by private insurers either as a standalone plan alongside Original Medicare or bundled inside a Medicare Advantage plan.

Every Part D plan has a formulary — its own list of covered drugs, sorted into tiers that determine what you pay. Two plans with identical premiums can differ by thousands of dollars a year for the same person, because one covers their specific medication on tier 2 and the other puts it on tier 4 or not at all.

The Inflation Reduction Act reshaped this part meaningfully: insulin cost-sharing is capped, recommended adult vaccines are free under Part D, and there is now an annual cap on what a beneficiary pays out of pocket for covered drugs — with the option to spread that cost across the year in monthly payments rather than absorbing it all at once.

Medigap — also called Medicare Supplement Insurance — is private coverage that sits behind Original Medicare and pays the deductibles and coinsurance it leaves behind. Plans are standardised by letter, so a Plan G is the same set of benefits from every insurer; only price and service differ. Most plans cover the Part B 20% coinsurance in full, which is what converts Medicare from "80% covered, no ceiling" into something predictable.

Medigap cannot be combined with Medicare Advantage — it's specifically designed to wrap around Original Medicare. And the timing matters enormously, which we come back to below.

Medicaid is the other. People eligible for both Medicare and Medicaid — "dual eligible" — generally have their Medicare cost-sharing covered, and gain access to services Medicare doesn't touch, most importantly long-term custodial care. There are also Medicare Savings Programs that pay Part B premiums for people over the strict Medicaid limit, and Extra Help, which reduces Part D costs. All three are widely under-claimed.

This list surprises people more than any other part of Medicare:

• Long-term custodial care — help with bathing, dressing, eating, and supervision. Not covered by any part of Medicare, at home or in a facility, regardless of how long it's needed. This is the single biggest financial exposure most families face.
• Routine dental care, dentures, routine vision care, eyeglasses, and hearing aids under Original Medicare.
• Most care outside the United States.
• Cosmetic surgery, and most alternative therapies.

“We assumed Medicare would cover the nursing home. It covers about twenty days of it, and only after a hospital stay.”— A conversation we have with families almost every week

Your federal Medigap Open Enrollment Period lasts six months, starting the first month you are at least 65 and enrolled in Part B. During that period, insurers cannot use your health to deny a policy they offer or charge more for it. State protections may add other rights.

Outside that window, in most states, Medigap insurers can medically underwrite — meaning they can charge more or decline entirely based on health history. This is why the choice between Original Medicare and Medicare Advantage is less reversible than it looks. Someone who picks Advantage at 65 and wants to move to Original Medicare with a Medigap policy at 74, after a cancer diagnosis, may find that no insurer will sell them one.

A handful of states have stronger consumer protections here. Most don't. It's worth one call to your state's SHIP counseling program to find out which kind you live in — before the six months elapse.