WASHINGTON, APRIL 5, 2026 —
Key Takeaways
- Medicare Part A covers hospital stays, skilled nursing, and hospice — and is free for most Americans who paid into the system for at least 10 years
- Medicare Part B covers doctor visits, outpatient care, and preventive services — and costs $202.90 per month in 2026, automatically deducted from Social Security checks for most enrollees
- Parts C and D — Medicare Advantage and prescription drug coverage — are sold by private insurers and require careful annual comparison because costs, coverage, and networks vary dramatically by plan and zip code
More than 67 million Americans are enrolled in Medicare. Yet surveys consistently find that the majority of beneficiaries cannot accurately explain what their plan covers — or explain the difference between Part A and Part B, let alone navigate the gap between original Medicare and Medicare Advantage. That confusion costs real money: people miss covered benefits, pay out of pocket for services that are included, and stay in plans that no longer serve them.
Here is a clear, complete explanation of the four parts of Medicare — what each covers, what each costs, and what every American approaching 65 needs to know before they enroll.
Medicare Part A — Hospital Insurance
Medicare Part A covers inpatient hospital care, skilled nursing facility stays, home health care, and hospice care. It is the foundation of Medicare.
Cost: Most Americans pay $0 in monthly premiums for Part A. If you or your spouse worked and paid Medicare taxes for at least 40 quarters — 10 years — your Part A premium is fully paid. If you worked between 30 and 39 quarters, you pay $278 per month in 2026. Fewer than 30 quarters means the full premium of $505 per month.
Hospital coverage specifics: Part A covers your hospital stay in full for the first 60 days after you meet the annual deductible of $1,632 in 2026. From days 61 to 90, you pay a daily copay of $408. Beyond 90 days, you draw on lifetime reserve days, which come with a daily copay of $816. After those run out, you are responsible for the full cost.
What Part A does not cover: Outpatient care, doctor visits, preventive services, most prescription drugs, and long-term custodial care — all of which fall under other parts of Medicare or must be covered by supplemental insurance.
Medicare Part B — Medical Insurance
Medicare Part B covers doctor visits, outpatient procedures, lab tests, medical equipment, and preventive services including annual wellness visits, flu shots, mammograms, and colonoscopies.
Cost: The standard monthly premium in 2026 is $202.90 — a $17.90 increase from 2025 and the second-highest Part B premium increase in program history. For most recipients, this is automatically deducted from their Social Security check. Higher-income beneficiaries pay more through an Income Related Monthly Adjustment Amount (IRMAA): individual filers with income above $109,000 pay premiums ranging from $284.10 to $689.90 depending on income tier.
The annual Part B deductible is $283 in 2026. After meeting the deductible, Medicare pays 80% of most covered services — leaving you responsible for the remaining 20%, which has no cap under original Medicare.
Medicare Part C — Medicare Advantage
Medicare Advantage — officially called Part C — is an alternative to original Medicare offered by private insurance companies that contract with Medicare. Instead of Parts A and B covering you separately, an Advantage plan bundles that coverage into one plan and typically includes prescription drug coverage and extra benefits like dental, vision, and hearing.
Cost: Many Medicare Advantage plans advertise $0 monthly premiums beyond what you already pay for Part B. However, Advantage plans have their own deductibles, copays, and out-of-pocket maximums — and importantly, they use provider networks, meaning you may not be able to see any doctor you choose.
The key trade-off: Original Medicare lets you see any doctor or hospital in the country that accepts Medicare — which is the vast majority. Medicare Advantage restricts you to a network. If you travel frequently, live in multiple states seasonally, or have a specialist you cannot leave, original Medicare plus a Medigap supplemental policy may serve you better despite higher predictable monthly costs.
Medicare Part D — Prescription Drug Coverage
Part D covers prescription drugs and is sold by private insurers as either a stand-alone plan (added to original Medicare) or bundled into a Medicare Advantage plan.
Cost: Premiums vary by plan and location — typically $15 to $70 per month for stand-alone coverage. In 2026, a major change took effect: the Inflation Reduction Act capped out-of-pocket prescription drug costs for Medicare Part D beneficiaries at $2,000 per year — the first time a hard cap has ever existed in the program’s history.
What this means: If you take expensive medications — including specialty drugs for cancer, rheumatoid arthritis, or diabetes — the new $2,000 annual cap protects you from catastrophic drug costs that previously had no limit.
Medicare Coverage at a Glance
| Part | What It Covers | 2026 Monthly Cost | Key Limitation |
|---|---|---|---|
| Part A | Hospital, skilled nursing, hospice | $0 for most | Only inpatient — no outpatient |
| Part B | Doctors, outpatient, preventive | $202.90 standard | You pay 20% with no cap |
| Part C | Bundles A+B+usually D | $0 to $100+ (varies) | Network restrictions apply |
| Part D | Prescription drugs | $15–$70 (varies) | Must compare plans annually |
The Three Decisions Every New Medicare Enrollee Must Make
Decision 1: Original Medicare or Medicare Advantage? If you value freedom to choose any provider nationally and have complex medical needs, original Medicare plus a Medigap supplement is often the better choice despite higher monthly costs. If you are healthy, cost-conscious, and live in one area, Medicare Advantage often provides better value.
Decision 2: Do you need a Medigap policy? Original Medicare’s 20% coinsurance has no annual cap — meaning a serious illness could cost you tens of thousands of dollars. Medigap supplemental policies fill that gap. Plans G and N are the most popular in 2026. Premiums vary by age and location but typically run $100 to $250 per month.
Decision 3: Which Part D plan? Compare plans annually at Medicare.gov/plan-compare during the October 15 to December 7 open enrollment window. The cheapest premium plan is rarely the best option — look at the total cost including deductibles and copays for your specific medications.
