Medicare ABCD
A Deep Dive into Medicare Parts A, B, C, and D: What Each One Covers and Why It Matters
If you’ve just started exploring Medicare, you’ve probably come across the alphabet soup of Parts A, B, C, and D. While it might seem confusing at first, each part plays a distinct role in your healthcare coverage—and understanding them is key to choosing the right plan.
In this post, we’ll break down each part of Medicare in plain language, helping you make informed decisions about your healthcare options.
Medicare Part A – Hospital Insurance
What it covers:
Inpatient hospital care (after you’re admitted by a doctor)
Skilled nursing facility care (after a qualifying hospital stay)
Hospice care (for terminally ill patients)
Home health services (in limited situations)
Cost:
Most people don’t pay a monthly premium for Part A if they’ve worked and paid Medicare taxes for at least 10 years.
There is a deductible ($1,632 per benefit period in 2024) and possible coinsurance depending on how long you're hospitalized.
Important to know:
Part A doesn’t cover long-term custodial care (like assisted living or nursing home care if it’s not medically necessary). Many people are surprised by this, so it's important to plan for potential long-term care needs separately.
Medicare Part B – Medical Insurance
What it covers:
Doctor visits (primary care and specialists)
Outpatient services (like X-rays, lab tests, emergency room visits)
Preventive care (like mammograms, flu shots, and screenings)
Durable medical equipment (like wheelchairs or walkers)
Some home health care
Cost:
Most people pay a monthly premium (in 2024, it starts at $174.70 and increases with income).
There is also an annual deductible ($240 in 2024), and generally you pay 20% of the Medicare-approved amount for services after that.
Tip:
If you delay enrolling in Part B when you’re first eligible (and don’t have other qualifying insurance), you could face lifetime penalties and gaps in coverage.
Medicare Part C – Medicare Advantage
What it is:
Medicare Advantage (MA) is an all-in-one alternative to Original Medicare (Parts A & B), offered by private insurance companies approved by Medicare.
What it typically includes:
All services covered by Parts A and B
Most plans include Part D (prescription drug coverage)
Often includes extra benefits like:
Dental, vision, and hearing
Gym memberships (SilverSneakers)
Over-the-counter allowances
Cost:
You still pay your Part B premium, plus any additional premium the MA plan charges.
Out-of-pocket costs vary by plan (e.g., copays, coinsurance, deductibles).
Key things to consider:
Provider networks: Many MA plans are HMOs or PPOs, which means you may need to see in-network doctors.
Plan flexibility: These plans can change annually, so it's important to review your plan during each year’s Medicare Open Enrollment (Oct 15–Dec 7).
Medicare Part D – Prescription Drug Coverage
What it covers:
Prescription medications
Some vaccines (like shingles, flu, and COVID-19 vaccines)
How it works:
Offered through private insurance companies
Each plan has its own formulary (list of covered drugs), which is divided into tiers that affect what you pay.
Plans can vary widely, so choosing the right one depends on your prescriptions and preferred pharmacy.
Cost:
Monthly premiums vary by plan
Most plans include a deductible, copays, and a coverage gap (aka “donut hole”)—though this gap has been shrinking due to recent legislation.
Penalty alert:
If you don’t enroll in Part D when first eligible and go 63+ days without creditable drug coverage, you may face a lifetime penalty added to your monthly premium.
Here’s a quick guideline:
If you want basic coverage, you’ll enroll in Original Medicare (Parts A & B), and may add Part D and a Medigap (supplemental) policy.
If you prefer all-in-one convenience and extras, you might choose a Medicare Advantage plan (Part C) that often includes drug coverage and perks like dental.