Understanding Medicare: A Plain-Language Guide to Parts A, B, C, and D

By the WinDailyGames Editorial Team

Medicare is described in letters — Part A, Part B, Part C, Part D — and the letters don't explain themselves. The result is that a lot of people approach their 65th birthday knowing Medicare exists, knowing it matters, and not quite knowing what they're choosing between. This is a plain-language map of the whole thing: what each part covers, roughly what it costs, and how the pieces fit together.

One note on the dollar figures below. Medicare's premiums and deductibles are set fresh each year, announced in the fall for the year that follows. The amounts here are the confirmed 2025 figures, used to show the rough scale of each cost. For the exact figure in the current year, Medicare.gov always lists it.

The big picture: two ways to get Medicare

Before the individual parts make sense, it helps to know that they assemble into one of two basic setups.

The first is Original Medicare, which is Part A plus Part B, run directly by the federal government. Most people who choose this route also add a Part D drug plan and often a Medigap policy to cover the out-of-pocket costs. With Original Medicare you can see any doctor or hospital in the country that accepts Medicare, which is most of them.

The second is Medicare Advantage, which is Part C. These are plans run by private insurance companies that Medicare approves and pays. An Advantage plan bundles your Part A and Part B coverage, almost always includes drug coverage, and often adds extras like dental, vision, or hearing. In exchange, you usually have to use the plan's network of doctors and hospitals.

Almost everything else is detail underneath those two choices.

Parts A and B: Original Medicare

Part A is hospital insurance. It covers inpatient hospital stays, a limited stretch of skilled nursing facility care after a qualifying hospital stay, hospice care, and some home health care. Most people pay no monthly premium for Part A, because they (or a spouse) paid Medicare taxes for at least 10 years of work. Part A does have a deductible each time you're admitted to the hospital — it was $1,676 per benefit period in 2025 — rather than a single annual deductible.

Part B is medical insurance. It covers doctor visits, outpatient care, lab tests, preventive services like screenings and vaccines, and durable medical equipment such as walkers and wheelchairs. Part B charges a monthly premium — the standard amount was $185 a month in 2025, with higher earners paying more — and has a yearly deductible, which was $257 in 2025. After you meet the deductible, Original Medicare typically pays 80 percent of the approved cost of covered services and you pay the remaining 20 percent, with no annual cap on that 20 percent. That uncapped coinsurance is the main reason many people add a Medigap policy, described below.

Part C: Medicare Advantage

Part C, Medicare Advantage, is an all-in-one alternative to Original Medicare offered by private insurers. When you enroll in an Advantage plan, you still have Medicare, but the plan administers your benefits instead of the government doing it directly.

The appeal is bundling and extras. One plan covers your hospital and medical care, usually folds in prescription drugs, and frequently includes dental, vision, hearing, and a gym benefit — things Original Medicare doesn't cover. Many Advantage plans charge little or no premium beyond your Part B premium, which you keep paying.

The trade-offs are real and worth understanding before you choose. Advantage plans use networks, so you may be limited to certain doctors and hospitals, and you may need referrals or prior approval for some care. Plans can change their networks and their covered drugs from year to year. And unlike Original Medicare paired with Medigap, an Advantage plan has its own out-of-pocket maximum and cost-sharing structure that's specific to that plan. Neither setup is universally better; the right one depends on your doctors, your medications, your travel, and how you weigh predictable costs against bundled extras.

Part D: prescription drug coverage

Part D covers prescription drugs and is sold by private plans approved by Medicare. If you have Original Medicare, you add a standalone Part D plan. If you have a Medicare Advantage plan, drug coverage is usually built in.

Every Part D plan has a formulary — its specific list of covered drugs, sorted into pricing tiers. Two plans with the same premium can charge wildly different amounts for the same medication, which is why the most useful thing you can do when comparing plans is check each plan's coverage for the exact drugs you take, not just its premium.

A major change took effect in 2025: there is now an annual cap on what you pay out of pocket for covered prescription drugs under Part D — $2,000 in 2025, adjusted modestly upward in later years. Once your out-of-pocket spending on covered drugs reaches the cap, you pay nothing more for them for the rest of the year. This was a significant improvement for people with high drug costs.

One thing to watch: if you go without drug coverage when you're first eligible and don't have other creditable coverage, you can owe a late-enrollment penalty that's added to your premium permanently. If you don't take many medications now, a low-cost Part D plan is usually still worth having just to avoid that penalty later.

Medigap: insurance for the gaps in Original Medicare

Medigap, also called Medicare Supplement Insurance, is a separate private policy that helps pay the out-of-pocket costs Original Medicare leaves behind — deductibles, coinsurance, and that uncapped 20 percent. Medigap policies are sold by the letter (Plan G, Plan N, and so on), and the benefits for a given letter are standardized by law, so a Plan G from one company covers the same things as a Plan G from another. They compete on price and service, not coverage.

Two facts about Medigap are easy to miss and important. First, Medigap only works alongside Original Medicare — you cannot use a Medigap policy with a Medicare Advantage plan. Second, the best time to buy one is your Medigap Open Enrollment Period: the six months that begin when you're 65 or older and enrolled in Part B. During that window, an insurer cannot turn you down or charge you more because of your health. After it closes, in most states they can, which can make switching later difficult or expensive. It's a window worth not missing.

When you become eligible

Most people become eligible for Medicare at 65. Some qualify earlier through certain disabilities, or with conditions like ALS or end-stage renal disease.

Your Initial Enrollment Period is a seven-month window around your 65th birthday: the three months before the month you turn 65, the birthday month itself, and the three months after. If you're already receiving Social Security, you're usually enrolled in Parts A and B automatically. If you're not, you sign up yourself, and signing up on time matters — missing your window can mean lifelong late penalties on Part B and Part D, much like the Part D penalty described above.

If you're still working at 65 with solid health coverage through your job, the rules about delaying Part B without penalty are a genuine exception worth getting right. That's exactly the kind of question your state's free SHIP counselors (State Health Insurance Assistance Program) exist to answer, and it's worth a call before you assume anything.

Where to learn more

Medicare's official site, with the Plan Finder, current-year costs, and enrollment information: medicare.gov

To speak with Medicare directly: 1-800-MEDICARE (1-800-633-4227)

Your state's free, unbiased Medicare counseling through the State Health Insurance Assistance Program (SHIP), found via medicare.gov or 1-800-MEDICARE.