Key takeaways

  • Medicare has four parts: A, B, C, and D. Each part covers different aspects of healthcare.
  • Original Medicare (parts A and B) provides hospitalization and outpatient coverage, while Part D covers prescription drugs. Part C is a private alternative to Original Medicare with additional benefits.
  • While Original Medicare covers many healthcare services, it doesn’t cover services including long-term custodial care, cosmetic procedures, glasses, or hearing aids.

Medicare has four main options that offer healthcare benefits to people age 65 years and older and people with disabilities and some chronic conditions:

  • Medicare Part A provides basic hospitalization coverage.
  • Medicare Part B covers outpatient care like doctor visits and diagnostic tests.
  • Medicare Part C (Medicare Advantage) is a private option that combines Part A and Part B coverage and offers additional benefits.
  • Medicare Part D is prescription drug coverage.

Medicare is the insurance plan offered by the federal government for people age 65 years and older, as well as people with disabilities and people with end stage renal disease, a type of kidney failure.

When it comes to healthcare, it’s important to know what is covered and what isn’t. Some tools can make it easier for you.

Glossary of common Medicare terms

  • Out-of-pocket cost: This is the amount you pay for care when Medicare doesn’t pay the full cost or offer coverage. It includes premiums, deductibles, coinsurance, and copayments.
  • Premium: This is the monthly amount you pay for Medicare coverage.
  • Deductible: This is the annual amount you must spend out of pocket before Medicare begins to cover services and treatments.
  • Coinsurance: This is the percentage of treatment costs you’re responsible for paying out of pocket. With Medicare Part B, you typically pay 20%.
  • Copayment: This is a fixed dollar amount you pay when receiving certain treatments or services. With Medicare, this often applies to prescription medications.

Medicare has four parts: A, B, C, and D. Each part covers different aspects of healthcare.

You can enroll in one or more parts of Medicare, but the most common parts people enroll in are parts A and B, known as Original Medicare. These parts cover the majority of services.

People usually have to pay a monthly premium, but this varies based on income.

Medicare Part A covers hospital inpatient costs when you’re formally admitted to a hospital with a doctor’s order. It provides benefits for services like:

Part A also provides limited coverage for skilled nursing facilities if you have a qualifying inpatient hospital stay.

A qualifying stay is 3 consecutive days resulting from a formal inpatient admission order written by your doctor.

What does Medicare Part A cost?

Depending on your income, you may have to pay a premium for Part A coverage. If you have worked and paid FICA taxes for 10 years, you pay no premium for Part A.

However, you may have to pay copayments or a deductible for any services under Medicare Part A. You can apply for assistance or help if you can’t pay.

According to Medicare, in addition to a $1,676 deductible, your 2025 Part A costs include:

  • $0 coinsurance for hospitalization days 1 to 60
  • $419 coinsurance per day for hospitalization days 61 to 90
  • $838 coinsurance per day for hospitalization day 91 and beyond for each lifetime reserve day
  • all costs for each hospitalization day over your lifetime reserve days
  • no charge for the first 20 days of approved skilled nursing facility care
  • $209.50 per day for 21 to 100 days of approved skilled nursing facility care
  • all costs after 101 days of approved skilled nursing facility care
  • no charge for hospice care

For hospital services to be covered by Medicare, you must be approved and receive care in a Medicare-approved facility.

Medicare Part B covers your doctor’s services and preventive healthcare, such as yearly doctor visits and tests. People often have parts A and B together to get the most coverage.

For example, if you stay in a hospital, the stay would be covered under Medicare Part A, and the doctor’s services would be covered under Part B.

Part B covers a wide range of tests and services, including:

What does Medicare Part B cost?

Some of your Part B cost is a monthly premium of $185. However, your premium could be more or less depending on your income.

Some services are covered under Medicare Part B at no additional cost to you if you have an appointment with a doctor who accepts Medicare. If you need a service outside of what is covered by Medicare, you will have to pay for that service yourself.

However, many services also require you to pay a coinsurance cost of 20% of the Medicare-approved amount.

Medicare Part C, also called Medicare Advantage, refers to privately sold insurance options that include the same coverage as parts A and B, in addition to extra benefits like:

To purchase a Medicare Advantage plan, you must be enrolled in Original Medicare.

What does Medicare Part C cost?

You usually pay a premium for these plans, and you have to have services performed by doctors within your network. Otherwise, copayments or other fees may apply. Your Medicare Part C cost depends on the type of plan you select.

Medicare Part D covers prescription drugs not covered by Part B. Although this plan is optional, many people choose it for medication coverage.

What does Medicare Part D cost?

The cost for Medicare Part D varies depending on the kinds of medications you take, the plan you have, and which pharmacy you choose. You have to pay a premium, and depending on your income, you may have to pay additional costs. You may also have to make copayments or pay a deductible.

Each plan sets its own deductible limit, and some plans may not require one at all. However, in 2025, no plan can have a deductible higher than $590. After you reach your deductible, if the plan has one, you will be responsible for paying 25% of the Medicare-approved cost as coinsurance.

Once your out-of-pocket costs reach $2,000, you automatically enter catastrophic coverage and pay nothing for your prescriptions for the rest of the year.

While Medicare covers a wide range of care, not everything is covered. Original Medicare doesn’t typically cover:

Medicare also doesn’t cover long-term (custodial) care, such as a long-term stay in a nursing home. If you think you or a loved one may need long-term care, consider a separate long-term care insurance policy.

Medicare consists of four main types of coverage: Part A, Part B, Part C, and Part D. These choices offer many options to meet your healthcare needs.

While Medicare covers many healthcare services like hospitalization, doctor visits, and prescription drugs, there are medical services it doesn’t cover.

Medicare doesn’t cover long-term custodial care, cosmetic procedures, glasses, or hearing aids, among other services. You can consult the Medicare coverage tool or call 800-MEDICARE to see if a specific service is covered.