Medicare has four main parts: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage), and Part D (prescription drug coverage). Each part covers different services and has its own costs. There’s also a lesser-known companion called Medigap, which isn’t technically a “part” of Medicare but fills gaps in Parts A and B coverage.
Who Qualifies for Medicare
Most people become eligible at age 65. Your Initial Enrollment Period is a 7-month window that starts three months before you turn 65 and ends three months after the month of your birthday. If you miss this window, you may face late enrollment penalties that increase the longer you wait and stay with you for as long as you have coverage.
You can also qualify before 65 if you’ve received Social Security disability benefits for 24 months, or if you have end-stage renal disease (permanent kidney failure requiring dialysis or a transplant) and meet certain work history requirements. People with ALS qualify for Medicare as soon as their disability benefits begin, with no waiting period.
Part A: Hospital Insurance
Part A covers inpatient care. That includes hospital stays, skilled nursing facility care after a hospitalization, hospice care, and some home health services. Most people pay no monthly premium for Part A because they or a spouse paid Medicare taxes for at least 10 years while working.
What you do pay is a deductible each time you’re admitted to the hospital: $1,736 per benefit period in 2026. After that deductible, your first 60 days in the hospital cost nothing. Days 61 through 90 cost $434 per day, and if you need to dip into your 60 lifetime reserve days, the cost jumps to $868 per day. After day 150, Medicare stops paying entirely.
For skilled nursing facility stays, the first 20 days are fully covered. Days 21 through 100 cost $217 per day, and after day 100, you’re responsible for everything. Hospice care is covered at no cost for most services, with small copayments (up to $5 for prescription drugs used for symptom relief, and 5% of the approved amount for inpatient respite care).
Part B: Medical Insurance
Part B covers outpatient and preventive care. This includes doctor visits, lab tests, mental health services, durable medical equipment like wheelchairs and oxygen supplies, ambulance services, and certain outpatient prescription drugs. Most preventive services, such as flu shots and cancer screenings, are free if your provider accepts Medicare’s payment terms.
The standard Part B premium in 2025 is $185 per month. Higher earners pay more through an income-related surcharge called IRMAA. If you file individually and earn $106,000 or less (or $212,000 or less filing jointly), you pay the standard $185. Above those thresholds, your total monthly premium climbs in tiers, reaching as high as $628.90 per month for individuals earning $500,000 or more.
After you meet your annual deductible, Part B generally covers 80% of approved costs, leaving you responsible for the remaining 20%. There is no cap on what you can spend out of pocket under Original Medicare alone, which is one reason many people add supplemental coverage.
Part C: Medicare Advantage
Part C isn’t a separate benefit. It’s an alternative way to receive your Part A and Part B coverage through a private insurance company instead of directly through the federal government. These plans bundle hospital and medical insurance together and usually include Part D drug coverage as well.
The biggest draw is the extras. Most Medicare Advantage plans offer benefits that Original Medicare doesn’t cover at all: routine dental cleanings, vision exams, hearing aids, and fitness programs like gym memberships. Some plans charge a $0 monthly premium beyond the Part B premium you already pay, though lower premiums often come with more restricted provider networks.
Unlike Original Medicare, every Medicare Advantage plan is legally required to set an annual out-of-pocket maximum. Once you hit that limit, the plan covers 100% of your Part A and Part B services for the rest of the year. The tradeoff is that you typically need to use doctors and hospitals within the plan’s network for non-emergency care, and going out of network costs more or isn’t covered at all.
Part D: Prescription Drug Coverage
Part D covers outpatient prescription drugs that Part B doesn’t. It’s offered through private insurance companies, either as a standalone plan you pair with Original Medicare or as part of a Medicare Advantage plan. Each plan maintains its own formulary, which is the list of drugs it covers and the prices it charges for them.
A major recent change is the introduction of an annual out-of-pocket cap on prescription drug spending. For 2025, that cap was set at $2,000. In 2026, it adjusts slightly to $2,100 based on average drug spending trends. Before this redesign, many people with expensive medications faced thousands of dollars in costs once they hit a gap in coverage (sometimes called the “donut hole”). That gap has been eliminated, and once you reach the annual cap, you pay nothing more for covered drugs for the rest of the year.
Medigap: Filling the Gaps
Medigap policies, also called Medicare Supplement Insurance, are sold by private companies to help cover out-of-pocket costs under Original Medicare. These include the Part A deductible, Part B coinsurance (that 20% you owe after visits), skilled nursing facility coinsurance, and even emergency care during foreign travel.
Plans are standardized by letter. Plans A, B, C, D, F, G, K, L, M, and N each cover a specific set of benefits. Plan G is one of the most popular because it covers nearly all gaps except the Part B annual deductible. Plans C and F are no longer available to anyone who turned 65 on or after January 1, 2020. Plans F and G also offer high-deductible versions in some states, where you pay $2,950 in 2026 before the policy kicks in.
Plans K and L work differently from the rest. They cover a percentage of costs rather than 100%, but they come with annual out-of-pocket limits ($8,000 for Plan K and $4,000 for Plan L in 2026). Once you hit that limit, the plan pays all covered costs for the rest of the year.
One critical rule: you cannot have a Medigap policy and a Medicare Advantage plan at the same time. Medigap is designed exclusively for people on Original Medicare (Parts A and B). If you’re enrolled in Medicare Advantage, your plan’s built-in out-of-pocket maximum serves a similar protective function.
Original Medicare vs. Medicare Advantage
The choice between staying on Original Medicare (with or without Medigap) and switching to Medicare Advantage comes down to flexibility versus extras. With Original Medicare, you can see any doctor or hospital in the country that accepts Medicare, with no referrals or network restrictions. Adding a Medigap policy gives you predictable costs but means paying two premiums, and you still need a separate Part D plan for prescriptions.
Medicare Advantage bundles everything into one plan, often with dental, vision, and hearing benefits included, and sometimes at a lower monthly premium. But you’re generally limited to a network of providers, and the plan’s rules determine what you pay at each visit. Switching between the two is possible during certain enrollment periods, though buying Medigap after your initial enrollment window can be more expensive or require medical underwriting depending on your state.