Medicare Basics
Medicare Parts A, B, C, and D, explained simply
If you are approaching 65, leaving employer coverage, or helping a parent with Medicare, this is where to start.
Medicare can feel confusing at first. There are different parts, different plan types, enrollment windows, penalties, and cost-sharing rules. The good news is that the structure is more manageable once you see how the pieces fit together.
This guide walks through the basics in plain English so you can understand what each part does, what the major costs look like, and what to watch out for before you enroll.
Start here if you want the simple version
At the highest level, Medicare works like this. If you stay with Original Medicare, many people add a Medigap supplement to help cover the gaps.
Part A
Helps cover hospital-related care.
Part B
Helps cover doctors and outpatient care.
Part C
Medicare Advantage packages your Medicare benefits through a private plan.
Part D
Helps cover prescriptions.
The biggest decision usually is not whether to get Medicare. It is how you want to receive your coverage once you are eligible.
2026 Medicare costs at a glance
These are the baseline Medicare numbers most people should know first.
| Item | 2026 amount | What to know |
|---|---|---|
| Part A premium | Usually $0 | Most people pay no Part A premium if they or a spouse paid Medicare taxes long enough. |
| Part A hospital deductible | $1,736 per benefit period | This is not an annual deductible. You can owe it more than once in a year if separate benefit periods apply. |
| Part B standard premium | $202.90 per month | Higher-income beneficiaries pay more because of IRMAA. |
| Part B deductible | $283 per year | After that, Original Medicare usually pays 80% of approved Part B services. |
| Part D out-of-pocket cap | $2,100 in 2026 | After you hit the cap for covered Part D drugs, you pay $0 for covered Part D drugs for the rest of the calendar year. |
Last reviewed for 2026 Medicare amounts.
Part A: Hospital insurance
Part A helps cover inpatient hospital care, skilled nursing facility care after a qualifying hospital stay, hospice, and some home health services.
For many people, Part A is premium-free. But premium-free does not mean cost-free. The most important thing to understand is that Part A uses a benefit-period deductible, not a simple once-per-year hospital deductible.
In 2026
- Most people pay $0 for the Part A premium
- The hospital deductible is $1,736 per benefit period
- Hospital days 61 through 90 have a $434 per day copay
- Lifetime reserve days cost $868 per day
This is one reason many people look at Medigap coverage. Original Medicare leaves cost-sharing gaps, especially when larger medical events happen.
Part B: Medical insurance
Part B is your everyday medical coverage. It generally covers doctor visits, outpatient care, preventive services, lab work, imaging, durable medical equipment, and many other non-hospital medical services.
In 2026, the standard Part B premium is $202.90 per month and the Part B deductible is $283 for the year. After you meet the deductible, Original Medicare usually pays 80% of approved Part B charges, and you generally pay the remaining 20%.
One major gap
Original Medicare does not include a built-in out-of-pocket maximum for Part A and Part B services. That is a major reason people compare Medicare Advantage and Medigap.
Who pays more for Part B because of income?
If your modified adjusted gross income from 2024 is above certain levels, your 2026 Part B premium may be higher.
| 2024 income if you file individually | 2024 income if you file jointly | 2026 Part B monthly premium |
|---|---|---|
| $109,000 or less | $218,000 or less | $202.90 |
| Above $109,000 up to $137,000 | Above $218,000 up to $274,000 | $284.10 |
| Above $137,000 up to $171,000 | Above $274,000 up to $342,000 | $405.80 |
| Above $171,000 up to $205,000 | Above $342,000 up to $410,000 | $527.50 |
| Above $205,000 and less than $500,000 | Above $410,000 and less than $750,000 | $649.20 |
| $500,000 or above | $750,000 or above | $689.90 |
If your income has dropped because of retirement or another qualifying life-changing event, you may be able to ask Social Security to reduce your IRMAA.
How Medicare Advantage and drug coverage fit in
These are the two parts that often create the most plan-shopping questions.
Part C: Medicare Advantage
Medicare Advantage is an alternative way to receive your Medicare benefits through a private insurance company approved by Medicare.
- Includes Part A and Part B
- Many plans also include Part D drug coverage
- May include extra benefits such as dental, vision, hearing, or fitness-related benefits
- Provider networks, referral rules, formularies, and cost-sharing vary by plan
Part D: Prescription drug coverage
Part D covers outpatient prescription drugs. If you stay with Original Medicare, you usually buy a standalone Part D plan. If you choose Medicare Advantage, drug coverage is often built into the plan.
- No Part D plan can have a deductible higher than $615 in 2026
- Medicare drug plans now generally work through deductible, initial coverage, and catastrophic coverage stages
- Your yearly out-of-pocket costs for covered Part D drugs are capped at $2,100 in 2026
- Once you reach that cap, you pay $0 for covered Part D drugs for the rest of the calendar year
If you delay Part D and go 63 days or more without creditable prescription coverage, you may face a permanent late-enrollment penalty.
Medigap: Medicare Supplement insurance
If you choose Original Medicare, many people also buy a Medigap policy to help pay the deductibles, copays, and coinsurance that Original Medicare leaves behind.
Medigap plans are standardized. That means a Plan G covers the same basic benefits regardless of carrier. The main differences are usually price, service, and carrier factors.
Enrollment windows that matter most
These are the Medicare timing windows that can affect when you enroll, change coverage, or avoid penalties.
| Enrollment period | When | What it generally allows |
|---|---|---|
| Initial Enrollment Period | 3 months before the month you turn 65 through 3 months after | Sign up for Medicare when first eligible. |
| Medigap Open Enrollment | 6 months starting when you have Part B and are 65 or older | Buy Medigap with the strongest federal protections. |
| Medicare Open Enrollment | October 15 to December 7 | Change Medicare Advantage or Part D coverage for the next year. |
| Medicare Advantage Open Enrollment | January 1 to March 31 | If already in Medicare Advantage, switch plans or return to Original Medicare. |
| Special Enrollment Period | Varies | Sign up or make changes after certain life events, such as losing employer coverage. |
Working past 65? This is where mistakes often happen.
If you are still working at 65 and covered by employer insurance, you may be able to delay Part B without penalty. But this depends on the type of coverage and when that coverage ends.
The key issue is timing.
- Your Part B Special Enrollment Period generally lasts 8 months after your employment ends or your job-based health coverage ends, whichever happens first
- If you sign up during that Special Enrollment Period, your Part B coverage generally starts the month after Social Security receives your completed forms
- If you miss that window, you may have to wait for the General Enrollment Period, and coverage generally starts the month after you sign up
This is one of the easiest ways to create a coverage gap by accident, so review the timing before employer coverage ends.
Common Medicare mistakes to avoid
These are the problems we want people to catch before they become expensive.
Missing your first enrollment window
Waiting too long to enroll in Part B or Part D can create permanent penalties.
Assuming a low-premium plan is automatically cheaper
Monthly premium is only one piece of the cost picture. Copays, deductibles, coinsurance, prescriptions, and provider access matter too.
Not checking doctors and prescriptions
A plan is only a good fit if it works with the doctors, hospitals, and medications you actually use.
Treating Medicare like a one-time decision
Plans, networks, formularies, and costs can change. Reviewing coverage each year is smart.
Want help making sense of your options?
You do not have to figure Medicare out by yourself. We help people understand their options, compare coverage paths, review doctors and prescriptions, and avoid timing mistakes.
There is no cost for our help, and no pressure to enroll.
We will explain it clearly, answer your questions, and help you make the choice that fits your situation.