Key Takeaways
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Medicare is divided into four distinct parts—A, B, C, and D—and each serves a very different role in your healthcare.
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You need to understand how these parts work together, what they exclude, and what you’re responsible for to avoid unexpected costs and gaps in coverage.
Medicare Part A: Hospital Insurance
Medicare Part A covers inpatient hospital care, but there are specific rules around what qualifies. You are covered for semi-private rooms, meals, general nursing, and other services during a hospital stay. Skilled nursing facility care, hospice care, and limited home health care are also included—but under strict conditions.
What’s covered under Part A:
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Inpatient hospital stays
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Care in a skilled nursing facility (after a qualifying hospital stay)
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Hospice care
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Some home health services
What isn’t covered:
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Long-term custodial care
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Private-duty nursing
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Personal care like bathing, dressing, or eating assistance if it’s the only care you need
Most people don’t pay a monthly premium for Part A if they’ve worked at least 40 quarters (10 years) and paid Medicare taxes. However, there is a deductible per benefit period, which in 2025 is $1,676, and coinsurance may apply depending on the length of your hospital stay.
Medicare Part B: Medical Insurance
Part B covers outpatient care, doctor visits, lab tests, preventive services, durable medical equipment, and some home health care. It is essential for routine and ongoing medical treatment.
What’s covered under Part B:
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Doctor and outpatient services
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Lab tests and imaging
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Preventive screenings and vaccines
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Mental health services (both inpatient and outpatient)
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Durable medical equipment like wheelchairs or walkers
In 2025, the standard monthly premium is $185, with a deductible of $257 per year. After meeting the deductible, you generally pay 20% of the Medicare-approved amount for most services. Part B is optional, but delaying enrollment without other creditable coverage may lead to permanent late penalties.
How Part A and B Work Together (Original Medicare)
Together, Parts A and B are referred to as “Original Medicare.” They cover a broad range of hospital and medical services but come with significant out-of-pocket costs and no limit on how much you could spend in a year. That’s why many people consider additional coverage.
Gaps in Original Medicare:
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No coverage for most prescription drugs
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No dental, vision, or hearing coverage
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No cap on out-of-pocket spending
You can see any doctor or specialist who accepts Medicare, and referrals aren’t required. However, the freedom of access comes with financial responsibility.
Medicare Part C: Medicare advantage
Medicare Part C, or Medicare Advantage, is an alternative to Original Medicare. These plans are offered by private companies approved by Medicare and are required to cover everything Original Medicare covers. Many of them include extra benefits like routine dental, vision, or hearing care.
Key features of Part C:
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Combines Part A and Part B coverage
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Often includes Part D (prescription drugs)
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May offer extras like fitness programs, transportation, or wellness services
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Annual limit on out-of-pocket costs
While these plans offer convenience and bundled services, they usually come with provider networks. You may need to get care from doctors or facilities within the plan’s network, and referrals may be required for specialists.
Medicare Part D: Prescription Drug Coverage
Medicare Part D covers prescription medications. It’s optional but essential if you take ongoing prescriptions. Part D plans are offered through private insurance companies that are approved by Medicare.
What’s included in Part D coverage:
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Commonly prescribed brand-name and generic drugs
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Medications grouped into different tiers, each with different copayment amounts
2025 changes to know:
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The annual deductible can go up to $590
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There’s a $2,000 annual out-of-pocket cap on prescription drug costs
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After reaching the cap, you pay nothing for covered medications for the rest of the year
If you don’t enroll in Part D when first eligible and don’t have other creditable coverage, you may face a permanent late enrollment penalty.
Optional Yet Vital: Medigap (Supplement Insurance)
Medigap, also called Medicare Supplement Insurance, helps pay some of the costs that Original Medicare doesn’t cover, such as copayments, coinsurance, and deductibles.
You must be enrolled in both Part A and Part B to buy a Medigap policy, and these plans do not work with Medicare Advantage. They also don’t include Part D, so you’d need a separate Part D plan for prescriptions.
Why people consider Medigap:
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Predictable out-of-pocket costs
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Nationwide coverage with any provider who accepts Medicare
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No referrals needed
Enrollment is best during your Medigap Open Enrollment Period, which starts the month you turn 65 and are enrolled in Part B. During this six-month window, you can buy any policy available in your area without medical underwriting.
How and When to Enroll
Understanding when to enroll in each part of Medicare is critical to avoid coverage delays or penalties.
Initial Enrollment Period (IEP):
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Starts 3 months before the month you turn 65
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Includes your birth month and extends 3 months after
General Enrollment Period (GEP):
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Runs from January 1 to March 31 annually
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Coverage begins July 1 if you enroll during this period
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Late penalties may apply for missing your IEP without creditable coverage
Annual Enrollment Period (AEP):
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Occurs from October 15 to December 7 each year
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You can switch, drop, or join a Medicare Advantage or Part D plan
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Changes take effect on January 1 of the following year
Medicare Advantage Open Enrollment:
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January 1 to March 31
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If you’re already in a Medicare Advantage plan, you can switch to a different one or return to Original Medicare
What’s Not Covered by Medicare (Any Part)
Understanding what’s excluded is just as important as knowing what’s included.
Services not covered by Medicare Parts A, B, C, or D:
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Long-term care (custodial care in nursing homes)
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Most dental care, dentures
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Eye exams and glasses for routine vision care
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Hearing aids and related exams
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Cosmetic surgery
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Care outside the United States (with limited exceptions)
To cover these gaps, some people look into supplemental plans or pay out-of-pocket.
Coordinating Medicare With Other Coverage
You may have other health coverage through an employer, union, military benefits, or Medicaid. Medicare coordinates differently depending on which coverage is primary.
Employer Coverage:
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If you’re still working and covered by an employer plan, you may delay Part B without penalty if the plan is considered creditable
TRICARE or VA Benefits:
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You need both Part A and Part B to keep TRICARE benefits
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VA benefits only apply at VA facilities; Medicare doesn’t cover services at VA hospitals
Medicaid:
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Medicaid may help with costs that Medicare doesn’t cover, such as premiums and copayments
Why Understanding the Parts Really Matters
Each Medicare part brings a unique layer of protection, but the fine print determines how that protection works. When you assume Medicare is automatic or all-inclusive, you could be left paying more than expected or missing care altogether.
Knowing the limitations and strengths of each part helps you:
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Plan for out-of-pocket costs
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Choose the right supplemental coverage
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Enroll at the right time to avoid penalties
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Coordinate benefits with any other insurance you may have
Get Clear on Your Medicare Choices
Medicare doesn’t work the same way for everyone. Your health, budget, and preferences shape what combination of parts and plans is best for you. Sorting through it all takes time, and misunderstanding how each part functions can lead to costly mistakes. If you want guidance tailored to your situation, get in touch with a licensed agent listed on this website for professional advice.
