Medicare Parts A, B, C, D & Medigap Explained Simply

When you’re approaching 65 or becoming Medicare-eligible, the alphabet soup of Medicare parts can feel overwhelming. Part A, Part B, Part C, Part D, and Medigap — what does each one actually cover, and which ones do you need? After working with thousands of Medicare clients, I’ve seen how crucial it is to understand these basics before making any enrollment decisions. One wrong move can cost you thousands in penalties or leave you with inadequate coverage when you need it most.

Medicare Part A: Hospital Insurance

Medicare Part A is often called “hospital insurance” because it covers your inpatient hospital stays. But it actually covers more than just hospitals — it also includes skilled nursing facility care, hospice care, and some home healthcare services.

The good news about Part A is that most people get it premium-free. If you or your spouse worked and paid Medicare taxes for at least 10 years (40 working quarters), you won’t pay a monthly premium for Part A coverage.

However, Part A does come with significant out-of-pocket costs you need to know about. In 2026, the Part A deductible is $1,736 per benefit period. Here’s how the costs break down for inpatient hospital stays:

• Days 1-60: You pay the deductible, then $0
• Days 61-90: $408 per day
• Days 91-150: $816 per day (using lifetime reserve days)
• After 150 days: You pay 100% of costs

A “benefit period” starts when you enter the hospital and ends when you’ve been out of the hospital or skilled nursing facility for 60 consecutive days. If you’re readmitted after that 60-day period, a new benefit period begins with a new deductible.

Agent Tip

Many clients are shocked to learn that Medicare Part A has no annual out-of-pocket maximum. If you need multiple hospital stays throughout the year, you could face several deductibles. This is why most people need additional coverage beyond just original Medicare.

Medicare Part B: Outpatient Medical Coverage

Medicare Part B covers outpatient medical services — think doctor visits, preventive care, lab tests, X-rays, and durable medical equipment like wheelchairs or oxygen equipment. Unlike Part A, Part B always comes with a monthly premium.

The standard Part B premium for 2026 is $202.90 per month. However, higher-income individuals pay more through IRMAA (Income-Related Monthly Adjustment Amount). The Part B deductible is $283 annually, and after meeting the deductible, you typically pay 20% of Medicare-approved amounts for most services.

Part B enrollment is crucial to get right. You have an Initial Enrollment Period that starts three months before you turn 65, includes the month you turn 65, and extends three months after. If you’re still working and covered by a group health plan, you can delay Part B without penalty. But if you miss your enrollment window without qualifying for an exception, you’ll face a late enrollment penalty of 10% of the monthly premium for every 12 months you were eligible but didn’t enroll.

This penalty lasts for as long as you have Part B coverage — potentially for life. That’s why understanding the best time to sign up for Medicare is so important.

Medicare Part C: Medicare Advantage Plans

Medicare Part C, also known as Medicare Advantage, is a private insurance alternative to original Medicare (Parts A and B). These plans are offered by private companies approved by Medicare and must provide at least the same coverage as original Medicare.

Most Medicare Advantage plans include prescription drug coverage (Part D) and often add extra benefits like dental, vision, or fitness memberships. They typically operate as HMO or PPO networks, meaning you’ll need to use specific doctors and hospitals to get the lowest costs.

Medicare Advantage plans often have $0 monthly premiums, which sounds attractive. However, they come with their own costs including copayments, coinsurance, and annual out-of-pocket maximums that can reach several thousand dollars.

You can enroll in Medicare Advantage during your Initial Enrollment Period or during the Annual Enrollment Period (October 15 – December 7). There’s also a Medicare Advantage Open Enrollment Period from January 1 – March 31 where you can switch Medicare Advantage plans or return to original Medicare.

Before choosing between Medicare Advantage and Medicare Supplement coverage, it’s essential to understand the key differences. Our detailed comparison of Medicare Supplement vs Medicare Advantage can help you make the right choice for your situation.

Medicare Part D: Prescription Drug Coverage

Medicare Part D provides prescription drug coverage through private insurance companies. You can get Part D coverage either through a standalone prescription drug plan (if you have original Medicare) or as part of a Medicare Advantage plan.

Part D enrollment follows the same timeline as Parts A and B — you have a seven-month Initial Enrollment Period around your 65th birthday. If you have creditable prescription drug coverage through an employer or other source, you can delay enrolling without penalty. But you must enroll within 63 days of losing that creditable coverage.

The penalty for late Part D enrollment is significant. For each month you’re eligible but don’t have creditable coverage, you’ll pay an extra 1% of the national base premium. In 2026, this penalty is based on a national base premium amount, and it’s added to your monthly Part D premium for as long as you have coverage.

Part D plans have their own deductibles (up to $615 in 2026), and coverage goes through different phases including the “donut hole” or coverage gap. Once you reach $2,100 in total drug costs, you enter catastrophic coverage where you pay very little for medications.

Agent Tip

Even if you don’t take any prescription medications now, I typically recommend enrolling in a basic Part D plan during your Initial Enrollment Period. The monthly premium might be $7-15, but it protects you from potentially significant penalties if you need medications later.

Medicare Supplement (Medigap) Insurance

Medicare Supplement insurance, also called Medigap, fills the gaps left by original Medicare. These standardized plans help pay for costs like deductibles, coinsurance, and copayments that original Medicare doesn’t cover.

The most popular Medicare Supplement plans are Plan G and Plan N. Plan G covers nearly all out-of-pocket costs except the Part B deductible, while Plan N covers most costs but requires small copays for doctor visits and emergency room visits.

Medicare Supplement plans work with any doctor or hospital that accepts original Medicare — there are no networks to worry about. You also don’t need referrals to see specialists. Monthly premiums typically range from $80 to $200 or more, depending on the plan, your location, and the insurance company.

The best time to buy a Medicare Supplement plan is during your six-month Medigap Open Enrollment Period, which starts the first month you’re enrolled in Part B and age 65 or older. During this period, you have guaranteed issue rights — insurance companies cannot use medical underwriting to deny coverage or charge higher premiums based on health conditions.

Understanding when is the best time to buy a Medicare supplement plan can save you from being denied coverage or paying higher premiums due to health issues.

How These Medicare Parts Work Together

Most people need some combination of these Medicare parts. Here are the two most common approaches:

Option 1: Original Medicare + Medigap + Part D

• Part A (hospital insurance) — usually premium-free
• Part B (medical insurance) — $202.90 monthly premium
• Medicare Supplement plan — $80-$200+ monthly premium
• Part D prescription drug plan — varies by plan and income

Option 2: Medicare Advantage (Part C)

• Replaces Parts A and B
• Usually includes Part D
• Often $0 monthly premium
• Higher out-of-pocket costs when you need care

The choice between these options depends on your health status, budget, preferred doctors, and how much you value predictable costs versus potentially lower monthly premiums.

Enrollment Periods and Deadlines

Understanding Medicare enrollment periods is crucial to avoid penalties and gaps in coverage:

Initial Enrollment Period (IEP): Seven months starting three months before your 65th birthday month, including your birthday month, and ending three months after.

General Enrollment Period: January 1 – March 31 each year if you missed your initial enrollment. Coverage starts July 1, and you may face late enrollment penalties.

Special Enrollment Periods: Available when you lose group health coverage or move outside your plan’s service area.

Annual Open Enrollment: October 15 – December 7 for Medicare Advantage and Part D changes.

Medicare Part	What It Covers	Typical Cost	Enrollment Period
Part A	Hospital, skilled nursing, hospice	Usually $0 premium	IEP or anytime
Part B	Doctor visits, outpatient care	$202.90/month	IEP or face penalties
Part C	Replaces A + B, often includes D	Often $0 premium	IEP, AEP, other SEPs
Part D	Prescription drugs	Varies by plan	IEP or face penalties
Medigap	Fills gaps in original Medicare	$80-$200+/month	Best during 6-month window

Common Medicare Enrollment Mistakes to Avoid

Working with thousands of Medicare clients has shown me the most costly mistakes people make:

Missing the Part B enrollment deadline: This results in a 10% penalty for every 12 months you could have enrolled but didn’t. The penalty lasts as long as you have Part B.

Delaying Part D without creditable coverage: The late enrollment penalty compounds monthly and can add significant costs to your drug coverage.

Waiting too long for Medigap: After your six-month open enrollment window, you may face medical underwriting and could be denied coverage or pay higher premiums.

Not understanding Medicare Advantage networks: Choosing a plan without checking if your doctors are in-network can result in much higher costs or the need to find new providers.

If you’re trying to decide between different Medicare Supplement options, our comparison of Plan G vs Plan N can help you understand which might work better for your specific situation.

Frequently Asked Questions

Do I need all four parts of Medicare?

Not necessarily. At minimum, most people need Parts A and B (original Medicare). Part D is highly recommended even if you don’t currently take medications. You’ll choose either Medicare Advantage (Part C) OR original Medicare plus a Medigap plan — not both.

Can I change my Medicare coverage after I enroll?

Yes, but your options depend on what type of coverage you have. Medicare Advantage and Part D plans can be changed during the Annual Open Enrollment Period (October 15 – December 7). Medigap plans can be more difficult to change after your initial enrollment period due to medical underwriting.

What happens if I’m still working at 65?

If you have creditable group health coverage through employment, you may be able to delay Parts B and D without penalty. However, you should still enroll in premium-free Part A if eligible. When your employer coverage ends, you’ll have a Special Enrollment Period to enroll in Parts B and D.

How much will Medicare cost me each month?

Costs vary significantly based on your choices. Original Medicare plus Medigap might cost $200-400+ monthly depending on your supplement plan and Part D choice. Medicare Advantage might have a $0 premium but higher costs when you need care. Our Medicare costs comparison breaks down the real expenses you can expect.

Can I use any doctor with Medicare?

With original Medicare plus Medigap, you can see any doctor who accepts Medicare assignment — which is about 95% of doctors nationwide. Medicare Advantage plans typically have network restrictions, so you’ll need to use doctors and hospitals within the plan’s network for the lowest costs.