Key Takeaways
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Medicare has four main parts: A, B, C, and D—but their names don’t tell the full story. Understanding what each part really includes, excludes, and costs is essential to making informed healthcare choices.
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The decisions you make when enrolling in Medicare can have long-term consequences on your coverage, out-of-pocket expenses, and access to care.
Understanding the Framework of Medicare
Medicare may look simple at first glance—just four parts labeled A, B, C, and D. But once you look closer, it quickly becomes more complicated. Each letter represents a different aspect of Medicare coverage, and the way these parts work together—or don’t—can leave you with unexpected gaps or expenses.
Whether you’re new to Medicare in 2025 or reviewing your current plan, it’s important to fully understand what each part does and doesn’t do. The alphabet might sound tidy, but the details are far from it.
Medicare Part A: Hospital Insurance
Part A is considered the foundation of Medicare and primarily covers inpatient care.
What It Covers
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Inpatient hospital stays
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Skilled nursing facility care (after a hospital stay)
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Hospice care
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Limited home health care
What It Doesn’t Cover
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Long-term custodial care
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Private duty nursing
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Personal comfort items (e.g., TV, phone)
Costs in 2025
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Most people don’t pay a premium if they worked and paid Medicare taxes for at least 40 quarters.
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The inpatient hospital deductible is $1,676 per benefit period.
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Daily coinsurance applies after 60 days of hospitalization.
Medicare Part B: Medical Insurance
Part B covers outpatient care and doctor services. It works together with Part A to form what’s known as Original Medicare.
What It Covers
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Physician visits (in or out of hospital)
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Preventive services (screenings, vaccinations)
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Outpatient care
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Durable medical equipment
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Mental health outpatient care
What It Doesn’t Cover
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Prescription drugs (with a few exceptions)
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Most dental, vision, and hearing services
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Routine foot care
Costs in 2025
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The standard monthly premium is $185.
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The annual deductible is $257.
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After meeting the deductible, you generally pay 20% of the Medicare-approved amount.
Medicare Part C: Medicare Advantage
Part C is an alternative to Original Medicare. These plans are offered by private companies approved by Medicare and must cover everything Original Medicare covers, but often include additional benefits.
What It Covers
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All services from Part A and B
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Often includes drug coverage
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May include dental, vision, and hearing benefits
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Fitness programs or telehealth access
What It Doesn’t Guarantee
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Consistent provider access—networks may be limited
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Predictable costs—copays and coinsurance vary widely
Important Considerations
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You still must pay your Part B premium.
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Enrollment is only allowed during specific periods, including the Initial Enrollment Period, Open Enrollment (Oct 15 – Dec 7), or a Special Enrollment Period triggered by certain life events.
Medicare Part D: Prescription Drug Coverage
Part D is stand-alone drug coverage you can add to Original Medicare or sometimes receive through a Medicare Advantage plan.
What It Covers
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Prescription medications (varies by plan)
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Vaccines not covered by Part B
What It Doesn’t Cover
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Drugs not listed on a plan’s formulary
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Over-the-counter medications
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Some specialty or high-cost drugs without prior authorization
Costs in 2025
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The average premium is $46.50.
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The maximum deductible is $590.
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Once you reach $2,000 in out-of-pocket spending on prescriptions, your plan covers 100% of covered drug costs for the rest of the year.
How the Parts Work Together (or Don’t)
You might assume that signing up for Medicare means you’re fully covered—but that’s rarely the case. Each part has its own rules, costs, and limitations. If you rely on Original Medicare (Parts A and B), you’ll likely need to add a Part D plan and consider a Medigap policy to reduce out-of-pocket costs.
If you opt for Medicare Advantage (Part C), you typically get Part D coverage bundled in—but at the expense of flexibility. Choosing between Original Medicare and Advantage isn’t just about coverage, it’s about how and where you receive care.
Key Enrollment Periods to Watch
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Initial Enrollment Period (IEP): Starts three months before your 65th birthday, includes the birthday month, and continues for three months after.
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Annual Enrollment Period (AEP): October 15 to December 7. You can switch plans, add or drop Part D, or move between Original Medicare and Advantage.
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General Enrollment Period (GEP): January 1 to March 31. For those who missed their IEP, though late penalties may apply.
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Medicare Advantage Open Enrollment: January 1 to March 31. Switch Advantage plans or return to Original Medicare.
Missing these windows can leave you stuck with unwanted coverage or no coverage at all for the rest of the year.
Medicare Doesn’t Cover Everything
Even if you enroll in all four parts, you could still face gaps in care. Some services are rarely covered by Medicare in any form:
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Long-term care or assisted living
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Most dental services, including dentures
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Routine vision exams and eyeglasses
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Hearing aids and exams
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Cosmetic procedures
You may need to look into supplemental coverage or budget for these expenses on your own.
The Role of Medigap (Supplemental Insurance)
Medigap is private insurance that helps cover some out-of-pocket costs left by Original Medicare, such as deductibles, copays, and coinsurance.
Key Points
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Only available to people enrolled in Original Medicare (Parts A and B)
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Does not work with Medicare Advantage plans
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Plans are standardized across most states (labeled A–N)
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You must pay a separate premium for Medigap
While Medigap adds a layer of financial protection, it also adds a monthly cost. Enrollment rules vary by state, but the best time to enroll is during your Medigap Open Enrollment Period, which lasts for six months after you turn 65 and enroll in Part B.
Mistakes to Avoid When Deciding Between Parts
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Assuming all plans are equal. Medicare Advantage plans vary widely in benefits and provider networks.
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Delaying Part B. Unless you have creditable employer coverage, waiting can lead to late penalties.
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Overlooking prescription drug costs. Not all Part D plans are created equal. Formularies and pharmacy networks matter.
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Ignoring travel coverage. Original Medicare has limited international coverage, and many Advantage plans offer none.
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Forgetting about enrollment periods. Missing a key window can cost you both money and options.
Reviewing Your Plan Every Year Matters
Even if you’re happy with your current Medicare plan, it’s crucial to review your Annual Notice of Change (ANOC) each fall. Plan costs, covered drugs, provider networks, and benefits can all change from year to year. What worked in 2024 may not suit your needs in 2025.
Compare plans during the Annual Enrollment Period and assess:
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Changes in monthly premiums or deductibles
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New coverage rules or exclusions
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Provider or pharmacy network changes
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Shifts in medication coverage or formulary tiers
Medicare in 2025: A System That Demands Attention
This year brings some important changes that impact all four parts:
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Part D now features a $2,000 out-of-pocket cap on prescription drugs
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Part B premiums and deductibles have increased from 2024
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Certain Advantage plans may offer fewer supplemental benefits compared to last year
Being passive about Medicare can cost you—both financially and in terms of your health. Stay proactive.
Don’t Assume the Letters Tell the Whole Story
While A, B, C, and D may sound like simple steps, Medicare’s structure requires your attention. The system is layered, evolving, and, in many ways, fragmented. Taking the time to understand how these parts work together—and where they fall short—can help you make the most of your Medicare coverage.
If you’re unsure about your choices or want to make sure you’re getting the right coverage for your health and financial needs, get in touch with a licensed agent listed on this website. Professional help can bring clarity to Medicare’s confusion.
