Parts of Medicare
Understanding Medicare Parts A, B and D
Medicare can feel overwhelming when you first become eligible. Understanding the differences between Medicare Parts A, B, and D is one of the most important steps in making informed healthcare decisions.
Original Medicare includes Part A (hospital insurance) and Part B (medical insurance). Part D helps cover the cost of prescription medications.
Our licensed agents are here to help simplify Medicare and guide you through your options based on your healthcare needs, prescriptions, and budget.
What is Part A?
Medicare Part A provides hospital insurance coverage and helps pay for inpatient and facility-based healthcare services.
You may be eligible for Medicare Part A if you:
✓ Are age 65 or older
✓ Have received Social Security disability benefits for at least 24 months
✓ Have End-Stage Renal Disease (ESRD)
✓ Have Lou Gehrig’s disease (ALS)
Medicare Part A may help cover:
✓ Inpatient hospital care
✓ Skilled nursing facility care
✓ Hospice care
✓ Some home health care services
Most individuals receive premium-free Part A if they or their spouse worked at least 40 quarters (10 years).
If you do not qualify for premium-free Part A:
✓ 30–39 quarters worked: $311/month in 2026*
✓ Fewer than 30 quarters worked: $565/month in 2026*
*Late enrollment penalties may apply if you do not enroll when first eligible.
What is Part B?
Medicare Part B provides medical insurance coverage for outpatient care, physician services, preventive services, and medical equipment.
Medicare Part B may help cover:
✓ Doctor services
✓ Diagnostic testing
✓ Durable medical equipment
✓ Preventive screenings and vaccinations
✓ Some home healthcare services
Original Medicare generally does not cover:
✕ Routine dental care
✕ Routine vision or hearing services
✕ Hearing aids
✕ Dentures
✕ Cosmetic surgery
✕ Most care outside the United States
Some of these expenses may be reduced with additional coverage options like Medicare Supplement insurance.
The standard 2026 Medicare Part B premium is $202.90 per month.
Higher-income beneficiaries may pay additional IRMAA charges based on income.
What is Part C (Medicare Advantage)?
Medicare Advantage plans (Part C) are private insurance alternatives to Original Medicare that combine Part A and Part B coverage and often include prescription drug benefits.
To enroll in a Medicare Advantage plan, you must:
✓ Be enrolled in both Medicare Part A and Part B
✓ Live within the plan’s service area
Medicare Advantage plans:
✓ Must provide at least the same coverage as Original Medicare
✓ Often include prescription drug coverage
✓ May include additional benefits like dental, vision, hearing, transportation, fitness, and more
Plan availability and benefits vary by location and carrier.
You may enroll:
✓ During your Initial Coverage Election Period (ICEP)
✓ During certain Special Enrollment Periods (SEP)
✓ During the Annual Enrollment Period (AEP)
You may also change plans during:
Costs may include:
✓ Monthly premiums
✓ Copays
✓ Coinsurance
✓ Deductibles
All Medicare Advantage plans include a yearly maximum out-of-pocket limit for covered medical services.
For 2026, Medicare’s maximum allowable limit is $9,250, though many plans offer lower limits.
You must continue paying your Medicare Part B premium while enrolled in a Medicare Advantage plan.
Certain services may require approval from your Medicare Advantage plan before care is provided.
Prior authorization may apply to:
✓ Specialist services
✓ Durable medical equipment
✓ Home health services
✓ Non-emergency hospital care
Understanding prior authorization requirements is important when evaluating Medicare Advantage plans.
✓ Confirm your doctors are in-network
✓ Check prescription formularies
✓ Review maximum out-of-pocket costs
✓ Understand referral requirements
✓ Review prior authorization rules
What is Medicare Part D?
Medicare Part D coverage helps cover the costs of prescription drugs. Enrolling in a plan with Part D benefits will help in reducing your out-of-pocket expenses for your medications.
If You Have Original Medicare
You can enroll in a stand-alone Prescription Drug Plan (PDP).
If You Have Medicare Advantage
You can enroll in a Medicare Advantage Prescription Drug plan (MAPD), which combines medical and prescription drug coverage into one plan.
All Part D plans include a formulary, or list of covered medications.
✓ Formularies include both generic and brand-name medications
✓ Lower-tier drugs generally have lower costs
✓ Most plans include 5–6 drug tiers
✓ Covered insulin is capped at $35 per month
✓ Formulary exceptions may be available for non-covered medications
Deductible Stage
You pay the full cost of prescriptions until reaching your plan deductible.
Initial Coverage Stage
You and your plan share the cost of covered medications through copays or coinsurance.
Catastrophic Coverage Stage
Once your qualifying out-of-pocket costs reach the annual threshold, covered medications will cost $0 for the remainder of the plan year.
Part D costs may include:
✓ Monthly premiums
✓ Deductibles
✓ Copays
✓ Coinsurance
Higher-income beneficiaries may also pay a Part D IRMAA surcharge.
Out-of-pocket costs vary depending on your prescriptions, pharmacy, and selected plan.
Preferred pharmacies are in-network pharmacies that offer lower prescription costs.
✓ Using preferred pharmacies may reduce your out-of-pocket costs
✓ Each plan has its own preferred pharmacy network
✓ Most plans also offer mail-order prescription services
Initial Enrollment Period (IEP)
This is the 7-month window surrounding your 65th birthday when most individuals first become eligible for Medicare.
Special Enrollment Period (SEP)
If you continue working past age 65 and maintain employer coverage, you may qualify for a Special Enrollment Period to enroll later without penalties.
Important: You generally must enroll in Part D within 63 days of losing employer drug coverage to avoid penalties.
Important Part D Terms
A formulary is a plan’s list of covered medications.
The amount you pay before your prescription coverage begins.
Prescription drugs are grouped into pricing tiers. Lower tiers generally cost less than higher tiers.
These are qualifying prescription expenses that count toward your annual out-of-pocket limit.
Some medications require approval from your plan before coverage is provided.
Plans may limit the amount of medication covered at one time.
Some plans require trying a lower-cost medication before approving a more expensive drug.
You may pay a lifetime penalty if you do not enroll in creditable prescription coverage when first eligible.
Need Help Understanding Your Medicare Options?
Choosing Medicare coverage can feel confusing, but you don’t have to navigate it alone.
Our licensed agents can help review your doctors, prescriptions, budget, and coverage priorities to determine which Medicare option may fit your needs.
