Medicare Part A is often referred to as "Hospital Insurance." It's important tyou understand that while Part A is "premium-free" for most, it is not "cost-free" when you actually need care.

Medicare Part A helps cover your care when you are admitted to a facility. For the vast majority of Americans, there is no monthly premium for Part A, provided you or your spouse paid Medicare taxes for at least 10 years (40 quarters).

What Does It Cover?

• Inpatient Hospital Care: Semi-private rooms, meals, general nursing, and drugs as part of your inpatient treatment.

• Skilled Nursing Facility (SNF): Care after a qualifying 3-day inpatient hospital stay.

• Hospice Care: Palliative care for terminal illness.

• Home Health Care: Limited medically necessary skilled care.

These services come with out-of-pocket costs like deductibles & copays.

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While Part A covers the hospital, Medicare Part B covers nearly everything else. This includes your doctor visits, outpatient services, and "preventive" care to keep you healthy. Unlike Part A, Part B always requires a monthly premium.

What Does It Cover?

• Doctor Visits: Both primary care and specialists.

• Outpatient Services: Lab tests, X-rays, and surgeries that don’t require an overnight hospital stay.

• Preventive Services: Flu shots, screenings (like mammograms or colonoscopies), and your "Welcome to Medicare" visit.

• Durable Medical Equipment (DME): Wheelchairs, walkers, oxygen tanks, and CPAP machines.

• Mental Health Care: Outpatient counseling and services.

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Medicare Part C, better known as Medicare Advantage, is an alternative to Original Medicare. These plans are offered by private insurance companies approved by Medicare.

How It Works

When you join an Advantage plan, you still have Medicare, but you receive your Part A and Part B benefits through the private plan instead of the federal government. Most plans also include Part D drug coverage (MA-PD).

Key Features for 2026

• All-in-One Coverage: Combines Hospital (A), Medical (B), and usually Drugs (D) into one plan with one ID card.

• Lower Monthly Premiums: Many plans offer a $0 monthly premium (though you must continue to pay your Part B premium).

• Out-of-Pocket Maximums: Unlike Original Medicare, these plans have a mandatory limit on what you pay for medical services each year. For 2026, the maximum is $9,250, though many plans set their limit much lower.

• Supplemental Benefits: Most plans offer "extra" benefits that Original Medicare doesn't cover, such as:

  • Dental: Cleanings, X-rays, and often major services.

  • Vision: Exams and allowances for glasses or contacts.

  • Hearing: Exams and hearing aid coverage.

  • Wellness: Gym memberships (like SilverSneakers) and over-the-counter (OTC) allowances.

What to Consider

Advantage plans often use provider networks (HMOs or PPOs). To get the lowest costs, you must see doctors who are "in-network." Additionally, some services may require prior authorization from the insurance company.

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Medicare Part D is the federal program that helps pay for self-administered prescription drugs. In 2026, Part D is seeing its most significant improvements in decades due to the Inflation Reduction Act.

Major 2026 Update: The $2,100 Cap

Starting in 2026, your total out-of-pocket spending for covered Part D drugs is capped at $2,100 per year. Once you reach this limit, you pay $0 for your covered prescriptions for the rest of the calendar year.

2026 Standard Benefit Structure

• Annual Deductible: Up to $615. (Some plans may offer a $0 deductible).

• Initial Coverage Phase: You generally pay 25% of the drug cost.

• Catastrophic Phase: Once you hit the $2,100 out-of-pocket cap, your cost-sharing ends.

• Lower Negotiated Prices: For the first time, Medicare has negotiated lower prices on 10 of the most expensive drugs (including Eliquis, Jardiance, and Januvia), which took effect Jan. 1, 2026.

The Medicare Prescription Payment Plan

If you have high drug costs early in the year, you can opt into a voluntary program that allows you to "smooth" your out-of-pocket costs. Instead of paying a large amount at the pharmacy counter, your plan will bill you in monthly installments throughout the year.

Get a quote for a Prescription Drug Plan →