Medicare Parts Explained: Complete Guide to Parts A, B, C & D

The Medicare parts explained simply: Part A covers hospital care, Part B covers outpatient medical care, Part C (Medicare Advantage) is a private alternative that bundles A and B together, and Part D covers prescription drugs. Original Medicare consists of Parts A and B together, while Medicare Advantage replaces Original Medicare with a single private plan. Each part has different costs, coverage, and enrollment rules. In 2026, the standard Part B premium is $202.90 monthly (up from $185.00 in 2025), the Part B deductible is $283 (up from $257), and the Part A deductible is $1,736 per benefit period (up from $1,676). About 65 million Americans are enrolled in Medicare, with 51% choosing Medicare Advantage and 49% staying with Original Medicare. The Medicare Advantage Annual Out-of-Pocket Maximum is capped at $8,850 for in-network services in 2026, and the new Inflation Reduction Act prescription drug cap is $2,100 annually for all Part D enrollees.

This guide explains each Medicare part for 2026, how they fit together, what you'll pay, and how to make the basic structural choice about your Medicare coverage. Information comes from Medicare.gov, CMS, and SSA.

Medicare Part A: Hospital Insurance

Medicare Part A is hospital insurance that covers inpatient hospital stays, skilled nursing facility care, hospice care, and limited home health care.

Most people receive Part A premium-free because they paid Medicare taxes through their working years (typically 40 quarters or 10 years of work). Premium-free Part A is automatic when you reach age 65 if you or your spouse paid Medicare taxes long enough. If you have fewer than 40 quarters of Medicare-covered employment but at least 30 quarters, you can pay the reduced Part A premium of $311 monthly in 2026 (up from $285 in 2025). If you have fewer than 30 quarters, you pay the full Part A premium of $565 monthly in 2026 (up from $518).

The Part A deductible for 2026 is $1,736 per benefit period. A benefit period starts the day you're admitted to a hospital or skilled nursing facility and ends after you've been out of the hospital or facility for 60 consecutive days. After paying the deductible, you pay $0 per day for hospital days 1-60. Days 61-90 cost $434 per day. Lifetime reserve days (91-150) cost $868 per day, and you have only 60 lifetime reserve days total.

Part A also covers skilled nursing facility care after a qualifying 3-day inpatient hospital stay. Days 1-20 in skilled nursing are covered fully. Days 21-100 cost $217 per day in 2026 (up from $204 in 2025). After day 100, you pay all costs.

Medicare Part B: Medical Insurance

Medicare Part B covers outpatient medical care, doctor visits, preventive services, durable medical equipment, mental health services, and some home health care. Almost everyone with Medicare needs Part B because it covers everyday medical care.

The standard Part B premium for 2026 is $202.90 monthly, a $17.90 increase from $185.00 in 2025. About 92% of Medicare beneficiaries pay the standard premium. The remaining 8% pay Income-Related Monthly Adjustment Amounts (IRMAA) added to their premium based on their tax returns from two years prior. IRMAA tiers range from $284.10 monthly (for incomes $109,001-$137,000 single, $218,001-$274,000 married) up to $689.90 monthly (for incomes $500,001+ single, $750,001+ married).

The Part B deductible for 2026 is $283, up from $257 in 2025. After meeting this deductible, you typically pay 20% of the Medicare-approved amount for covered services with no annual maximum, which is the gap that Medicare Supplement plans or Medicare Advantage often fill.

Most preventive services are fully covered with no deductible or coinsurance. This includes annual wellness visits, mammograms, prostate cancer screenings, colonoscopies, flu shots, pneumonia vaccines, and many other preventive services. Mental health benefits have expanded significantly in recent years, including coverage for marriage and family therapists and mental health counselors starting in 2024.

Medicare Part C: Medicare Advantage

Medicare Part C, commonly called Medicare Advantage, is a private alternative to Original Medicare. About 51% of Medicare beneficiaries (35+ million people) choose Medicare Advantage in 2026, according to KFF data.

Medicare Advantage plans bundle Part A, Part B, and usually Part D coverage into one plan administered by a private insurance company (Humana, AARP/UnitedHealthcare, Aetna, Anthem, etc.). The federal government pays the insurer a capitated monthly amount per member to manage all your Medicare benefits.

Common features of Medicare Advantage plans include lower upfront costs (many plans charge $0 monthly premium beyond the $202.90 Part B premium), network restrictions where you typically use in-network doctors and hospitals, often included Part D drug coverage, extra benefits not covered by Original Medicare like dental, vision, hearing, and fitness benefits, and an annual out-of-pocket maximum capped at $8,850 in-network for 2026.

The trade-offs of Medicare Advantage include network restrictions that may not cover your preferred providers, prior authorization requirements for some services that Original Medicare doesn't require, possible forced disenrollment if your plan exits the market (10% of MA enrollees lost their plans in 2026), and the difficulty of switching back to Original Medicare with Medigap supplement after your initial enrollment period because most states require medical underwriting.

Special Needs Plans (SNPs) are a category of Medicare Advantage plans designed for specific populations: people with chronic conditions (C-SNPs), people in institutions (I-SNPs), or people eligible for both Medicare and Medicaid (D-SNPs).

Medicare Part D: Prescription Drug Coverage

Medicare Part D covers prescription medications. About 17.9 million Medicare beneficiaries are enrolled in standalone Part D plans in 2026, while many more get drug coverage through Medicare Advantage plans that include Part D.

Standalone Part D plans pair with Original Medicare for beneficiaries who want drug coverage. They have separate premiums (averaging $40-$50 monthly in 2026), deductibles (up to $590), and copays that vary by drug formulary tier. The Inflation Reduction Act's 2026 changes include a $2,100 annual out-of-pocket maximum (up from $2,000 in 2025), the continued $35 monthly insulin cap, and $0 cost-sharing for all ACIP-recommended adult vaccines.

The Medicare Prescription Payment Plan automatically renews for 2026 participants. This plan lets you spread prescription costs across the year by paying the plan directly each month rather than paying high single-month costs at the pharmacy.

For low-income beneficiaries, Medicare Extra Help (Low-Income Subsidy or LIS) eliminates Part D premiums (with benchmark plans), waives the Part D deductible, and caps drug copays at $5.10 generic and $12.65 brand-name. Extra Help is worth $5,700 to $6,200 annually on average for those who qualify.

How the Medicare parts fit together

Understanding how Medicare parts fit together requires choosing one of two paths.

The Original Medicare path combines Part A and Part B as the foundation, then typically adds a standalone Part D plan for drug coverage. Most beneficiaries on this path also add a Medicare Supplement plan (Medigap) to cover the coinsurance, copays, and deductibles that Original Medicare doesn't. This path costs more monthly but provides any-provider flexibility nationwide, predictable annual costs, and protection against significant medical expenses.

The Medicare Advantage path replaces Original Medicare with a single Part C plan that bundles Part A, Part B, and usually Part D. You don't add Medigap because Medicare Advantage works differently. This path costs less monthly for healthy beneficiaries but accepts network restrictions, prior authorizations, and the risk of forced disenrollment if your plan exits the market.

The decision matters significantly because most states require medical underwriting if you try to switch to Original Medicare with Medigap after your initial 6-month Medigap Open Enrollment Period. The exceptions are Connecticut, Massachusetts, Maine, and New York where Medigap remains guaranteed-issue year-round, plus 16+ birthday rule states offering annual limited guaranteed-issue access.

For specific comparison guidance, see our Medicare vs Medicare Advantage, What Is Medicare Part C, and Medicare Supplement Plans 2026 guides.