Medicare is explained in letters, and to anyone new they mean nothing. Here is what Part A, B, C and D each cover, what each costs in 2026, and the two ways they combine — so the rest of this track has ground to stand on.
The four letters in one view
| Part | What it is | Covers | Who runs it | 2026 cost to you |
|---|---|---|---|---|
| Part A | Hospital insurance | Inpatient stays, skilled nursing after a hospital stay, hospice, some home health | The government | $0 premium for most people; $1,736 deductible per benefit period |
| Part B | Medical insurance | Doctor visits, outpatient care, tests, equipment, mental health, preventive care | The government | $202.90 a month; $283 deductible, then 20% of the approved amount |
| Part C | Medicare Advantage | A private plan that delivers A and B, usually with D and extras | Private insurers approved by Medicare | The Part B premium plus the plan's own premium (often $0) and copays |
| Part D | Drug coverage | Prescription medications | Private insurers | The plan's premium and copays, capped at $2,100 out of pocket |
The mental model: A and B are the foundation; C is a different way to receive them, from a private company; D adds drugs. The parts are not a menu you pick one item from. They are a vocabulary for pieces that combine in two main ways — Original Medicare, or Medicare Advantage — and the Original-vs-Advantage lesson lays out that fork.
Part A: hospital insurance
Part A is the inpatient side: a hospital stay once you are admitted, a limited stretch of skilled nursing facility care after a qualifying hospital stay, hospice, and some home health care. It is premium-free if you or your spouse paid Medicare taxes — the Medicare slice of FICA — for at least 10 years; you pre-paid it over a career.
Premium-free is not free. A hospital stay costs the $1,736 Part A deductible per benefit period in 2026, and a benefit period is not a calendar year: it starts when you are admitted and ends after 60 days out of the hospital, so two stays months apart can mean two deductibles. Long stays add daily coinsurance, covered in the costs lesson.
Part B: medical insurance
Part B is everything around the doctor's office: visits, outpatient procedures, lab tests, durable medical equipment, mental health services, and preventive care such as screenings and vaccines. Everyone pays a premium — $202.90 a month in 2026, deducted from your Social Security check when you receive one — and higher-income enrollees pay an IRMAA surcharge on top. After the $283 annual deductible you pay 20% of the Medicare-approved amount for most services, with no yearly cap on that 20%.
Part A + Part B = Original Medicare: the traditional government program, accepted by any doctor or hospital in the country that takes Medicare, with no network. Sign up on time — the enrollment lesson explains the 7-month window and the lifetime penalty for missing it.
Part C: Medicare Advantage
Part C is not a layer on top of A and B. A Medicare Advantage plan, sold by a private insurer under contract with Medicare, takes over delivering your Part A and Part B coverage, usually includes Part D, and often adds extras Original Medicare lacks — some dental, vision or hearing. You keep paying the Part B premium; the plan's own premium is often $0.
The trade in one sentence: a bundle, extras and a low premium, in exchange for a provider network, referrals, prior authorization, and copays as you use care up to the plan's annual out-of-pocket maximum. That trade is the central decision of this track.
Part D: drug coverage
Original Medicare covers almost no outpatient prescriptions, so Part D exists to fill the gap. You get it one of two ways:
| How you get Part D | Typical situation |
|---|---|
| A standalone Part D plan from a private insurer | Paired with Original Medicare |
| Built into a Medicare Advantage plan | Most Part C plans include it |
Each plan has its own premium, its own formulary (the list of drugs it covers, in tiers), and its own copays, but every plan shares the 2026 rule that matters most: your out-of-pocket spending on covered drugs is capped at $2,100 a year. Go without creditable drug coverage when you are first eligible and a late-enrollment penalty attaches to your Part D premium for life, which is why people on Original Medicare add a Part D plan even when they take no prescriptions yet.
The vocabulary is in place. The next lesson is the most important in the track: when to enroll, and the penalties that follow you for life if you miss the window.