Part A and Part B are known as Original Medicare. Medicare Advantage, also called Part C, is an alternative to Original Medicare. Part D plans provide coverage for prescription drugs.

Medicare is a health insurance program for people ages 65 and older, as well as those with certain health conditions and disabilities. It has four parts. Each part covers different healthcare services you might need.

Understanding what each part covers and how much it costs can help you get the most out of your Medicare coverage.

Part A is hospital insurance. It covers any tests or services you need during an inpatient stay and services like hospice. It also provides limited coverage for skilled nursing facility care and certain home healthcare services.

Most people do not have to pay a monthly premium for Part A. If you don’t meet the criteria for premium-free Part A, you’ll pay $278 or $505 each month.

Here are the basic costs for an inpatient hospital stay in 2024:

  • $1,632 deductible for each benefit period
  • $0 coinsurance for days 1 to 60 of treatment after you pay your deductible
  • $408 coinsurance per day for days 61 to 90 of treatment
  • $816 coinsurance per day for days 91 to 150 of treatment while using your 60 lifetime reserve days
  • 100% of the treatment costs for days 151+

For a skilled nursing facility stay:

  • $0 coinsurance for days 1 to 20
  • $204 coinsurance per day for days 21 to 100 of treatment
  • 100% of the treatment costs for days 101+

For home healthcare:

  • $0 for covered services
  • 20% of all Medicare-approved costs for durable medical equipment

For hospice:

  • $0 for covered services
  • $5 copayment for prescription drugs and similar products for pain relief or symptom management
  • 5% of all Medicare-approved costs for inpatient respite care

Part B is medical insurance. It covers the outpatient diagnosis, treatment, and prevention of medical conditions.

This includes visits to the emergency room, as well as preventive healthcare services such as doctor visits, screening and diagnostic tests, and some vaccinations.

In 2024, most people will pay a monthly premium of $174.70. Your premium may be higher depending on your income.

After you pay a $240 deductible, you’ll generally pay 20% of all Medicare-approved costs for covered services.

Some services are available at no out-of-pocket cost, including:

  • clinical laboratory services
  • home healthcare services
  • annual depression screening

You’ll pay an additional coinsurance or copayment amount for:

  • outpatient mental health care at a hospital outpatient clinic or hospital outpatient department
  • each day of partial hospitalization for mental health care in a hospital outpatient setting or community mental health center
  • each service you get in any hospital outpatient setting (except for certain preventive services)

Part C plans are required to cover the same basic services as Original Medicare, such as:

  • inpatient hospital care
  • limited stays at a skilled nursing facility
  • limited stays at an inpatient rehabilitation facility
  • outpatient care at a doctor’s office, urgent care center, health center, or clinic
  • inpatient and outpatient mental health services
  • preventive care, including routine exams, shots, lab tests, and screenings
  • limited outpatient prescription drugs
  • durable medical equipment
  • ambulance transport

However, unlike Original Medicare, Part C plans do not cover:

  • clinical trials
  • hospice care
  • the cost of getting a kidney for an organ transplant

Many Part C plans offer additional health and wellness benefits. Most Part C plans cover the following:

  • prescription drugs
  • routine vision, hearing, and dental care
  • fitness programs
  • over-the-counter items
  • telehealth and other remote-access technologies
  • meal delivery or other services

Some Part C plans cover:

  • transportation to doctor visits
  • acupuncture
  • bathroom safety devices
  • in-home support services
  • caregiver support services
  • telemonitoring services

Each Part C plan sets its own cost and coverage amounts. The premiums, deductibles, copayments, and coinsurance amounts you’ll pay depend on your chosen plan.

Staying in network — which means getting care from a list of approved healthcare professionals and facilities — usually costs less than going out of network.

Part D is prescription drug coverage. It helps pay for medications that Original Medicare doesn’t cover. Most Medicare Advantage plans include Part D coverage.

Each Part D plan sets its own cost and coverage amounts. The amount of coverage each plan provides depends on its formulary and tier system.

A formulary is a list of medications the plan covers. Those medications are then divided into groups or tiers, typically based on cost. Tiers typically break down like this:

  • Tier 1 ($): generics
  • Tier 2 ($$): preferred brand names
  • Tier 3 ($$$): nonpreferred brand names
  • Tier 4 ($$$$): speciality

The right plan for you will depend on your budget and healthcare needs. For example, if you take multiple prescriptions, you might want to purchase a comprehensive Part D plan with a low deductible.

Your options will depend on your city, region, or state, but most areas offer a variety of plans at different price points.