Medicare Basics — Parts A, B, C & D

Medicare is the federal health insurance program primarily for people 65 and older, as well as some younger people with a qualifying disability or End-Stage Renal Disease (ESRD). It is organized into four "parts," each covering a different slice of care.

Who is eligible for Medicare

A person generally qualifies for Medicare if they are:

• 65 or older, OR have a qualifying disability, OR have End-Stage Renal Disease (ESRD); AND
• A U.S. citizen or a legal resident who has lived in the U.S. for at least five years in a row.

Most people get premium-free Part A because they (or a spouse) paid Medicare taxes while working. More than 99% of beneficiaries pay no Part A premium. Part B always carries a monthly premium set each year by the federal government.

The two halves of "Original Medicare"

"Original Medicare" is the government-run program and is made up of Part A + Part B.

Part A — Hospital Insurance

Covers inpatient care, including:

• Inpatient hospital stays
• Skilled nursing facility (SNF) care (after a qualifying hospital stay)
• Hospice care
• Some home health care

Part A uses benefit periods, not a calendar-year deductible. A person pays the Part A inpatient hospital deductible each time they start a new benefit period, plus daily coinsurance for longer stays.

Part B — Medical Insurance

Covers outpatient and physician care, including:

• Doctor visits and outpatient services
• Preventive care and screenings
• Lab tests and X-rays
• Durable medical equipment
• Many outpatient treatments (Original Medicare typically pays 80% of approved costs for many Part B services, leaving the beneficiary responsible for the other 20% with no annual out-of-pocket maximum).

What Original Medicare does NOT cover

On its own, Original Medicare leaves notable gaps. It generally does not cover:

• Prescription drugs taken at home (that's Part D)
• Routine dental, vision, and hearing (cleanings, eyeglasses, hearing aids)
• Custodial long-term care (help with daily living, most nursing-home care)
• The ongoing 20% coinsurance and deductibles, with no cap on yearly out-of-pocket spending

Because of these gaps, most people add coverage — either a Medicare Advantage plan (Part C) or a Medicare Supplement (Medigap) plus a stand-alone Part D drug plan.

Part C — Medicare Advantage

Part C, or Medicare Advantage (MA), is an alternative to Original Medicare offered by private insurance companies approved by Medicare. An MA plan must cover everything Parts A and B cover, and usually bundles in extra benefits (often prescription drugs, and frequently dental, vision, or hearing). The beneficiary still pays their Part B premium. See Medicare Advantage (Part C).

Part D — Prescription Drug Coverage

Part D helps pay for prescription drugs. It comes either as a stand-alone prescription drug plan (PDP) added to Original Medicare, or built into a Medicare Advantage plan (called an MAPD). See Part D Prescription Drug Coverage.

The most common ways people put it together

Because Original Medicare doesn't cover everything, people typically choose one of these approaches:

1. Original Medicare + a Part D drug plan — Parts A and B, plus stand-alone drug coverage.
2. Original Medicare + Part D + a Medicare Supplement (Medigap) — adds a Medigap policy to help pay the deductibles, copays, and coinsurance that Original Medicare leaves behind.
3. Medicare Advantage (Part C) — Parts A and B delivered through one private plan that may also include drug coverage and extra benefits, usually with a provider network.

There is no single "best" path — the right fit depends on a person's budget, preferred doctors, prescriptions, travel habits, and health needs. An agent's role is to educate so the consumer can make an informed choice.

Quick reference

See also: Medicare Advantage (Part C), Medicare Supplement (Medigap) Plans & Underwriting, Part D Prescription Drug Coverage, Medicare & ACA Enrollment Windows, Medicare Advantage vs. Medigap — Side by Side.