What You Must Know About the Different Parts of Medicare

Clipboard with paper that says Medicare in large font and Parts A-D listed below.

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last updated 1 December 2023

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Medicare can be complicated, especially if you are a new enrollee or someone checking their plan during the Medicare open enrollment period, which is currently underway. Keep in mind that open enrollment will close in less than a week on Thursday Dec. 7.

It's important to understand what benefits you will receive so you can decide if you want prescription drug coverage, an Advantage plan or additional coverage through Medigap. Below is a quick explanation of each part of Medicare.

Medicare Part A

Part A covers inpatient care at hospitals and skilled nursing facilities as well as hospice and some home health care. If you paid Medicare payroll taxes for at least 40 quarters, the Part A premium is free. For 2024, there is a deductible of $1,632. You also must pay coinsurance for hospital stays longer than 60 days. For more details, read What You’ll Pay for Medicare in 2024.

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Medicare Part B

Part B pays for doctor visits, outpatient care and some home health care. For 2024, the deductible is $240 and the base premium is $174.70 per month. After hitting the deductible, you pay 20% of expenses unless you have either Medicare Advantage or supplemental coverage.

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Medicare Part C

Part C is commonly called Medicare Advantage. Beneficiaries are covered for Parts A and B through private insurers instead of traditional government-administered Medicare. Most Advantage plans include prescription drug coverage. For 2024, the average monthly premium is $18.50.

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Medicare Part D

Part D refers to standalone prescription drug coverage through private insurers. If your Advantage plan includes prescription drugs, you don't need Part D. If you elect original Medicare and want medications covered, you will need a Part D plan. Modern Medigap plans don't cover prescription drugs, but if you purchased a policy before Jan. 1, 2006 and still have that plan, then your Medigap policy may include drug coverage.

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Medigap

Supplemental coverage is commonly referred to as Medigap. This is private insurance to supplement original Medicare coverage. The plans cover part or most of the cost sharing, such as coinsurance and co-payments, for Parts A and B, depending on which lettered Medigap plan you choose.