Medicare Parts A, B, C & D Explained: What Each Part Covers

If you are approaching Medicare eligibility, you have probably heard people talk about Medicare Part A, Part B, Part C and Part D. The confusing part is that these are not four versions of the same insurance. Each part serves a different purpose, and understanding how they work together can help you avoid coverage gaps, unexpected costs and enrollment mistakes.

For Californians turning 65 or becoming eligible for Medicare through disability, here is a straightforward look at what each Medicare part actually does.

Medicare Part A: Hospital Insurance

Think of Medicare Part A as your hospital coverage. It generally helps pay for medically necessary inpatient care, including:

• Hospital stays
• Skilled nursing facility care under qualifying circumstances
• Hospice care
• Certain home health care services

For most people, Part A comes with no monthly premium because they or their spouse paid Medicare taxes long enough while working. However, Part A still has deductibles and other cost sharing.

In 2026, the Part A hospital deductible is $1,736 per benefit period. (Medicare)

Important: Part A is not simply «free hospital insurance.» Knowing what it covers and what you may still have to pay is an important part of planning for healthcare expenses.

Medicare Part B: Medical Insurance

Medicare Part B covers many healthcare services you receive outside of an inpatient hospital stay. This can include:

• Doctor and specialist visits
• Outpatient care
• Preventive services
• Certain diagnostic tests
• Durable medical equipment
• Some home health services

Part B generally requires a monthly premium. The standard Part B premium is $202.90 per month in 2026, although people with higher incomes may pay more. The 2026 Part B deductible is $283. (Medicare)

One important distinction is that Original Medicare does not have a yearly limit on your out of pocket costs. This is one reason some beneficiaries consider supplemental coverage such as Medigap or choose Medicare Advantage instead. (Medicare)

Medicare Part C: Medicare Advantage

Medicare Part C, commonly called Medicare Advantage, works differently from Parts A and B.

Medicare Advantage plans are offered by Medicare approved private insurance companies. Instead of receiving your Medicare benefits directly through Original Medicare, you receive your Part A and Part B benefits through the Medicare Advantage plan.

Most Medicare Advantage plans also include Part D prescription drug coverage.

Depending on the plan, you may also receive additional benefits such as:

• Dental services
• Vision benefits
• Hearing benefits
• Wellness programs
• Other supplemental benefits

The tradeoff is that Medicare Advantage plans often use provider networks, and your copayments, deductibles and other costs depend on the specific plan. However, these plans have a yearly maximum out of pocket limit for covered services. (Medicare)

In 2026, Medicare Advantage costs vary by plan, and you must continue paying your Part B premium to remain enrolled. (Medicare)

Medicare Part D: Prescription Drug Coverage

Medicare Part D helps pay for prescription medications you take at home and certain recommended vaccines.

If you have Original Medicare, you can generally purchase a separate Part D prescription drug plan. Many Medicare Advantage plans already include Part D coverage. (Medicare)

One detail that often gets overlooked is the formulary. A formulary is the list of medications a plan covers. Two Medicare drug plans may cover different medications or place them on different cost tiers.

In 2026, the maximum Part D deductible is $615, although some plans have lower deductibles or none at all. Once a beneficiary reaches $2,100 in out of pocket spending for covered Part D drugs in 2026, catastrophic coverage begins and covered Part D drugs have $0 out of pocket cost for the remainder of the calendar year. (Medicare)

That makes reviewing your actual prescriptions an important part of choosing a Medicare drug plan.

So, How Do Parts A, B, C and D Fit Together?

The easiest way to understand Medicare is to think of it this way:

Part A = Hospital
Part B = Medical
Part C = Medicare Advantage alternative to Original Medicare
Part D = Prescription drugs

There are two main ways to receive Medicare coverage.

Option 1: Original Medicare

You generally have:

Part A + Part B

You can then add:

Part D for prescription drugs

and potentially:

Medigap to help with certain out of pocket costs.

With Original Medicare, you can generally see any doctor or hospital that accepts Medicare anywhere in the United States. (Medicare)

Option 2: Medicare Advantage

You enroll in a Medicare Advantage plan that provides your Part A and Part B benefits.

Most Medicare Advantage plans also include:

Part D prescription drug coverage

Many plans also offer additional benefits that Original Medicare does not routinely cover.

The right choice depends on factors such as your doctors, prescriptions, preferred hospitals, budget, travel habits and how you want to manage healthcare costs.

Don’t Wait Until You Need Care to Understand Your Medicare

Choosing Medicare coverage is about more than picking the plan with the lowest premium. A plan that looks inexpensive may not be the best fit if your doctors are outside its network or your prescriptions fall into expensive drug tiers.

Likewise, choosing Original Medicare without considering supplemental coverage can leave you responsible for significant cost sharing.

Enrollment timing matters too. Delaying certain coverage without qualifying for an exception can result in late enrollment penalties. For example, going 63 days or more without creditable prescription drug coverage after becoming eligible for Part D can lead to a permanent Part D late enrollment penalty. (Medicare)

The Bottom Line

Medicare becomes much easier to understand once you separate the four parts:

Part A helps with hospital care. Part B covers medical and outpatient services. Part C provides a private plan alternative to Original Medicare. Part D helps with prescription drug costs.

But understanding the parts is only the beginning. Your healthcare needs, medications, doctors and financial situation should all be considered before selecting coverage.

If you are approaching Medicare eligibility in California, taking time to review your options before enrollment can help you make a more informed decision and avoid costly surprises.

Cal-Society Insurance Services can help California Medicare beneficiaries understand their available coverage options and compare plans based on their individual needs.