It doesn’t have to be alphabet soup – the 4 parts of Medicare and what they cover!  

Medicare is quite the alphabet soup. Most people have no clue how to tell one part from the next. In this blog, we are going to explain what the four different parts of Medicare are, what they cover, and what it means for someone who needs medical care under this program.

Medicare basics

There are four parts of Medicare:

  • Medicare Part A
  • Medicare Part B
  • Medicare Part C
  • Medicare Part D

I’m going to briefly explain what they are and provide resources for further research if you want to know more. Here are some quick things you should know about Medicare before we get started.

You can get onto Medicare when you are 65 or older, or earlier than that if you have ALS or kidney failure. When you turn 65, the government sends you a booklet about Medicare covering the basics. It’s not mandatory to join Medicare, but most people use at least some part of it to support their healthcare needs.

How is coverage determined? Medicare coverage varies by location, as Federal and state laws and the decisions made by local companies play a part in what is covered in your area. In order for Medicare to cover any costs incurred, you need to get a doctor to deem the treatment necessary. The program will not cover “any old cost” without authorization from a doctor that you need treatment.

We’re about to get into what Medicare covers, one part at a time. Let us preface the discussion by saying that Medicare does not cover everything.

Here are some examples of what is excluded:

  • Long-term care (extended stay in a nursing home)
    • Dental care and dentures
    • Eye exams (if you need eyeglasses)
    • Cosmetic surgery 
    • Hearing aids

So, to answer a question we get frequently: no, Medicare does not include dental care, as you can see from above.

What is Medicare Part A?

Now, what does it get you? Here’s what the government has to say about Medicare Part A. Basically it covers:

  • Inpatient stays in a semi-private room
  • Skilled nursing
  • Nursing home care
  • Hospice care
  • Home health care – on an intermittent, not 24/7 basis

We often get the question, “What part of Medicare covers it if I am hospitalized?” As you can see, Part A does.

What does Part A cost?

You don’t have to pay a premium for Medicare Part A, because it already came out of your paycheck when you were working.

Ah ha!

“Great – I’m all set!” you say, “If I have to go into a nursing home, they’ll pay the bill for me!”

Well, not so fast.

Just because it’s covered, doesn’t mean 100% of the costs are absorbed by Medicare. You’ll have to pay some portion of the cost if you were to exceed your stay in a hospital, for example, past 60 days. And those costs are not insignificant – as per this table below from

Please refer to this cost breakout for more specifics.

What is Medicare Part B and what does it cover?

This part covers preventative services, ambulance services, medical equipment, outpatient mental healthcare, doctor visits, and some prescription drugs.

What does Part B cost?

It’s based on your income. The base premium is $174.70 and adjustments occur after you pass $103,000 in modified adjusted gross income. For a single person earning between $103,000 and $129,000, for example, your premium is adjusted upwards by $69.60 per month.

The annual deductible was $240 in 2024 and after you meet it, you generally will pay about 20% of the cost of services. Some services are free after you meet the deductible, for example, covered home health services.

Please refer to this cost breakout for more specifics.

Medicare Part C – what is it, and what does it cover?

Here’s where it gets a little bit tricky.

Medicare Part C is also called Medicare Advantage (or “MA” for short). It covers the same things as Part A and Part B and usually includes prescription drugs. However, the method of reimbursement is different from Parts A and B. There may be out-of-pocket costs that don’t go along with the typical schedule for A and B.  And, each company who administers the MA plan may have different referral procedures.

Why do people elect for Part C, Medicare Advantage, instead of just taking Parts A and B? With MA, you are dealing with a private health insurance company instead of the government. If you don’t anticipate having many out-of-pocket needs and you think the extent of your needs will not be high, this decision may make sense. However, if you have a complicated medical situation and will likely require a great deal of medical care, it can be bothersome to have to navigate all the nuances of an MA plan.

What about Medicare Part D – what does it cover?

Part D offers prescription drug coverage

There are two ways you can get it:

  • You sign up for it when you first become eligible for Medicare. If you don’t elect for it at sign up but decide later on that you want it, you’ll have to pay a penalty fee. Part D coverage is part of Medicare, although the specific drug plan is provided through a private health insurance company. You pay a fee to the health insurance company for your Part D coverage.
  • If you have Medicare Advantage, you may be able to elect for prescription drug coverage through MA Part C. Make sure your specific MA plan offers drug coverage – not all MA Plans do, so it’s a good idea to make sure that yours offers it.

There’s no way to predict with accuracy what the monthly premium for prescription drug coverage is, because each plan may vary. That is because drug coverage is provided through health insurance companies directly, not through the government. There’s no general cost schedule that applies universally – you’d have to consult with the health insurance company directly to figure out what your specific drugs will cost you.

If you were to elect for Medicare Advantage drug coverage, you would not have to pay a premium. This is because MA Part C is grouped in with Parts A and B.

There is an out-of-pocket cap of $8,000 in 2024 and $2,000 in 2025 for prescription drugs. Once you have spent $8,000 in 2024, you are not required to pay anything more out-of-pocket for your prescription drugs.


It’s important to know what the different parts of Medicare provide, because you need to be able to outline your future medical costs. This is all part of a financial plan to guide you through retirement.

If you haven’t thought through this yet, set up a time to meet and we can discuss Medicare planning and how to factor it into your retirement plans.

Sources (2023, October 12). Newsroom. 2024 Medicare Parts A & B Premiums and Deductibles.

Konrad, Walencia. (21 July, 2023). Nerdwallet. Medicare Part D Drug Coverage: Benefits Overview and Plan Options. What Part A covers. What isn’t covered by Part A and Part B? What Part B covers How to get prescription drug coverage. Costs.

Tsosie. Claire. (2023, September 6th). Nerdwallet. Medicare Part A: What It Covers, What It Costs.