If you've ever tried to explain Medicare to someone and found yourself saying "well, it's complicated" — you're not alone. Parts A, B, C, D — and then something called Medigap on top of that. It's a lot. But once you see how the pieces fit together, it actually makes sense. Let's walk through each part, plain and simple.
Why Medicare Is Divided Into Parts
Medicare was designed to cover different types of healthcare through different programs. Each part handles a different category of care. Here's the quick version before we go deeper:
- Part A — Hospital Insurance
- Part B — Medical Insurance (doctors, outpatient care)
- Part C — Medicare Advantage (a private bundled alternative)
- Part D — Prescription Drug Coverage
Part A — Hospital Insurance
Part A covers care when you're admitted to a hospital, skilled nursing facility, hospice, and some home health services. About 99% of Medicare beneficiaries pay $0 per month for Part A — as long as they or their spouse worked and paid Medicare taxes for at least 10 years (40 quarters).
The catch isn't the premium — it's the deductible. Part A charges by "benefit period," not by the calendar year. A benefit period starts when you're admitted and ends 60 consecutive days after discharge. A second hospitalization after that gap means a second deductible. In 2026, that's $1,736 per benefit period.
| Part A Cost | 2026 Amount |
|---|---|
| Monthly Premium | $0 for most people |
| Hospital Deductible | $1,736 per benefit period |
| Days 1–60 Coinsurance | $0 |
| Days 61–90 Coinsurance | $434/day |
| Skilled Nursing (Days 21–100) | $217.50/day |
Part B — Medical Insurance
Part B covers what most people think of as "going to the doctor." Physician visits, outpatient procedures, lab work, preventive screenings, mental health services, and durable medical equipment.
In 2026, the standard monthly Part B premium is $202.90. After you meet the $283 annual deductible, Medicare covers 80% of approved services. You pay the remaining 20% — with no annual cap. That unlimited 20% exposure is exactly why many people add a Medigap supplement plan.
| Part B Cost | 2026 Amount |
|---|---|
| Monthly Premium | $202.90 (standard) |
| Annual Deductible | $283 |
| Your share after deductible | 20% — no annual cap |
A Medicare Supplement plan (Medigap) fills this gap — covering the coinsurance Original Medicare leaves to you.
Part C — Medicare Advantage
Part C, called Medicare Advantage, is a private insurance alternative to Original Medicare. A private insurer approved by Medicare handles your coverage — and usually bundles drug coverage in the same plan.
In 2026, the average Medicare Advantage premium in California is about $11/month — and many plans charge $0. You still pay your Part B premium ($202.90) regardless. The appeal: extra benefits like dental, vision, hearing, and fitness memberships. The trade-off: you're limited to the plan's provider network. In Los Angeles County alone, there are 74 Medicare Advantage plans to choose from.
Part D — Prescription Drug Coverage
Part D covers the medications you pick up at the pharmacy. Offered through private insurers, it must be purchased separately — unless your Medicare Advantage plan already includes it.
Big 2026 news: there's now a $2,100 annual out-of-pocket cap. Once you hit that limit, your plan pays 100% for covered drugs for the rest of the year. The average Part D premium in 2026 is $64.96/month, with a deductible of up to $615.
Don't skip Part D when you're first eligible
Skip Part D when you're first eligible and don't have other creditable drug coverage? You'll face a permanent late enrollment penalty — 1% of the national base premium for every month you waited. That penalty never goes away.
Meet Gloria — A Lesson From Irvine
Gloria, 67 — Irvine, CA
Gloria was perfectly healthy when she turned 65 and skipped Part D — no prescriptions, didn't seem worth it. Two years later, her doctor put her on a blood pressure medication and a cholesterol drug. When she enrolled in Part D, she discovered a permanent 24% penalty — 24 months of waiting. For something a $10/month plan at 65 would have prevented.
The lesson: enroll in Part D when you're first eligible, even if you take nothing today. A low-cost plan protects you from the penalty and from the unexpected.
Which Parts Do You Actually Need?
Path 1 — Original Medicare: Enroll in Part A and Part B. Add a Part D plan for drugs. Consider a Medigap supplement to cover the 20% gap. Maximum flexibility — any Medicare-accepting doctor, anywhere.
Path 2 — Medicare Advantage: Enroll in Part A and Part B (required). Choose an Advantage plan that bundles A, B, and usually D into one. You trade flexibility for bundled coverage and often extra benefits.
Neither path is universally better. The right choice depends on your doctors, medications, health history, and budget.
Not sure which path is right for you?
Book a free 30-minute call with a licensed specialist — no pressure, no jargon.
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