Medicare Parts A, B & D Explained: Complete 2026 Guide

If you're approaching age 65 or already there, understanding Medicare Parts A, B, and D is essential. While Medicare can seem complicated with its multiple parts, costs, and enrollment periods, this guide will break down everything you need to know in clear, easy-to-understand English.

Whether you prefer Original Medicare (Parts A, B, and D) or are considering Medicare Advantage, this guide will explain exactly what each part covers, what it costs in 2026, how deductibles and copays work, and how to choose the right combination for your situation.

Introduction to Medicare Parts

Medicare has four main parts, though this guide focuses on Parts A, B, and D, which make up Original Medicare. Part C (Medicare Advantage) is a private alternative that combines all of these.

Original Medicare means you receive your coverage directly from the federal government through Medicare. Each part covers different services:

• Part A: Hospitalization and post-hospital care
• Part B: Medical services and doctor visits
• Part D: Prescription drugs (through a private insurer)

Many people combine these three parts with a supplemental insurance called Medigap to reduce their out-of-pocket costs.

Part A of Medicare: Complete Hospital Insurance

Medicare Part A is the component that covers hospitalization and post-care services. If you worked in the United States, you likely already paid Medicare taxes that fund this part.

What Does Part A Cover?

Part A covers a variety of hospital and care services:

• Hospital stays (inpatient): Room, meals, medications and medical supplies during your stay
• Skilled nursing facility care: After a hospital stay, if your doctor determines you need it
• Hospice services: For terminal patients, including pain relief and support services
• Some home care services: Nursing, therapy and medical supplies in your home
• Dialysis care: For people with kidney failure

Medicare Part A Costs in 2026

Cost Element	2026 Amount	Description
Monthly Premium	$0 (usually)	Free for most who worked 10+ years. $278/month if not qualified
Deductible per Benefit Period	$1,612	You pay this amount before Medicare begins paying for hospitalization
Coinsurance Days 1-60	$0	Medicare pays 100% after deductible
Coinsurance Days 61-90	$403/day	You pay this copay for each additional day
Coinsurance Days 91+	$806/day	Higher cost for stays exceeding 90 days

Part A Eligibility without Premium

You qualify for Part A without a premium if:

• You or your spouse paid Medicare taxes for at least 10 years (40 quarters)
• You are age 65 or older
• You have a disability and receive Social Security benefits for 24 months
• You have end-stage renal disease or ALS

Part B of Medicare: Medical Services and Preventive Care

Medicare Part B covers your doctor visits, preventive services, procedures, and medical equipment. It is an essential component that complements the hospitalization coverage of Part A.

What Does Part B Cover?

Part B provides broad coverage for outpatient services:

• Doctor visits: Office visits, urgent care, emergency care
• Outpatient services: Procedures, tests and radiology
• Laboratory services: Blood tests, diagnostic tests
• Durable medical equipment: Wheelchairs, oxygen, walkers, special mattresses
• Preventive services: Annual physical exam, vaccines, mammograms, colonoscopies
• Physical and occupational therapy: For recovery and rehabilitation
• Mental health services: Psychology and psychiatry sessions
• Speech language pathology services: Therapy for speech problems

Standard Premium vs IRMAA Premium in 2026

Most people pay the standard Part B premium of $185 per month in 2026. However, if your income exceeds certain limits, you will pay a higher income-related premium adjustment (IRMAA).

What is IRMAA? IRMAA (Income-Related Monthly Adjustment Amount) is an additional premium adjustment. Medicare reviews your prior year income (from two years ago) to determine if you qualify.

Modified Adjusted Gross Income (Individual)	Part B Monthly Premium (2026)
Up to $97,000	$185
$97,001 to $123,000	$259
$123,001 to $153,000	$334
$153,001 to $183,000	$408
$183,001 to $213,000	$483
More than $213,000	$560

Part B Deductible and Copays

• Annual deductible: $240 in 2026. After paying this, you pay 20% of covered services.
• Preventive copays: Many preventive services covered at 100% with $0 cost
• Regular copays: 20% of the Medicare-allowed amount after deductible
• Emergency services: May be subject to copays depending on the situation

Part D of Medicare: Prescription Drug Coverage

Medicare Part D covers prescription medications. It is an important component, especially if you take regular medications. Part D is offered through private insurers, not directly by the government.

How Does Part D Coverage Work?

Part D has a tiered coverage system throughout a calendar year. Understanding each stage is crucial to controlling your medication costs.

The 4 Coverage Stages of Part D (2026)

Stage	Spending Range	You Pay	Plan Pays
1. Deductible	$0 to $585	100% (up to deductible)	$0
2. Initial Coverage	$585 to $8,350	Usually 25%	Usually 75%
3. Coverage Gap (Donut Hole)	$8,350 to $10,750	25% to 0% (varies by drug)	Gradually increases
4. Catastrophic Coverage	Over $10,750	5% copay/coinsurance	95%

Understanding the Donut Hole (Coverage Gap)

The "donut hole" or "coverage gap" occurs between the initial coverage stage and catastrophic coverage. Once you and your drug plan have spent $8,350 together, you enter the donut hole.

In the donut hole, you pay more for your medications. However, in recent years, this gap has become significantly smaller. Generic drugs have greater coverage in the gap, and maximum copays have dropped considerably.

Important fact: Even though you're in the donut hole, keep taking your medications as prescribed. Spending in the donut hole counts toward your annual out-of-pocket limit, after which you enter catastrophic coverage.

Catastrophic Coverage and Out-of-Pocket Limit

Once you have spent $10,750 on medications in 2026, you enter catastrophic coverage. At this stage, you only pay 5% of your medication costs, and the plan pays 95%.

The out-of-pocket limit is the maximum amount you must pay during the year. After reaching this limit, the plan covers 100% of your prescription medications for the rest of the year.

Part D Premium and Penalties

• Average premium: $40-50 per month (varies by plan and state)
• Typical range: Between $15 and $150 per month
• Late enrollment penalty: If you don't enroll when first eligible, you pay 1% of the base premium per month you weren't enrolled, for life

How to Choose a Part D Plan

Each insurer has different Part D plans with different covered drugs (formularies), different copay levels, and different costs. To choose the best plan:

• List your current medications: Including dosage and frequency
• Use Medicare.gov comparison tool: Enter your medications to see cost comparisons
• Consider the plan formulary: Are your drugs covered? At what level?
• Compare estimated annual costs: Premium, deductible, copays at all stages
• Check if you qualify for assistance: Low-income individuals may qualify for copay assistance

Differences between Original Medicare (A, B, D) and Medicare Advantage

When you enroll in Medicare, you have two main options. Understanding the differences is crucial to making the right decision:

Original Medicare (Parts A, B and D plus optional Medigap)

How it works: You receive coverage directly from the government. For drugs, you enroll in a Part D plan from a private insurer. You can add Medigap to reduce out-of-pocket costs.

Advantages:

• Maximum flexibility in choosing doctors and hospitals
• See any doctor who accepts Medicare nationwide
• No network restrictions
• No referral requirements
• Can change drug plans each year without penalties
• Can move to another state without losing coverage

Disadvantages:

• Requires paying for Medigap (typically $200-400+ per month)
• More insurance pieces to coordinate (Part A, B, D, Medigap)
• Total costs may be higher depending on your health
• No annual out-of-pocket maximum in Original Medicare

Medicare Advantage (Part C)

How it works: A single private plan that provides all Medicare coverage (A and B) plus drugs (D) usually integrated.

Advantages:

• Often $0 additional premium
• Annual out-of-pocket maximum protects expenses
• Additional benefits like dental, vision, hearing, transportation
• One plan to manage
• Drugs usually included

Disadvantages:

• Must use doctors within the plan's network
• May require prior approval for procedures
• Plan can change every year
• Less flexible if you move to another state
• If you travel frequently, limited coverage outside the area

Enrollment Periods for Each Part

There are specific times of year when you can enroll in Medicare without penalties. Missing these deadlines can result in permanent penalties.

Initial Enrollment Period (IEP)

Begins 3 months before your 65th birthday and lasts 7 months (including the month you turn 65).

• If you enroll in the first 3 months: coverage begins the month you turn 65
• If you enroll in your birth month: coverage begins the 1st of next month
• If you enroll in the last 3 months: coverage begins 1-2 months after enrollment

General Enrollment Period (GEP)

January 1 to March 31 each year. Coverage begins April 1. Note: Penalties may apply if you enroll outside your eligible period.

Open Enrollment Period (OEP) for Medicare Advantage

October 1 to December 31 each year, you can switch between Medicare Advantage plans or change to Original Medicare without penalties.

Special Enrollment Period (SEP)

Special periods that may open if you experience certain life events such as:

• Loss of health coverage
• Change in income situation qualifying for assistance
• Change of state (moving)
• Marriage or divorce

Late Enrollment Penalties

If you don't enroll in Medicare when eligible, you may face permanent penalties. These penalties are added to your premium for life.

Part B Penalty

• Amount: 10% of the standard Part B premium
• Duration: Lifetime, even if you enroll later
• Calculation: Multiplied by each full year you weren't enrolled when eligible
• Example: If you waited 2 years, you pay 20% more premium permanently

Part D Penalty

• Amount: 1% of the base Part D premium per month without coverage
• Duration: Lifetime
• Calculation: Multiplied by each month you weren't enrolled after becoming eligible
• Example: If you waited 12 months, you pay 12% more premium permanently

Exceptions that avoid penalties:

• Current employer coverage while working
• TRICARE (for veterans)
• Coverage for undocumented workers

How to Choose the Right Combination of Parts A, B, and D

Most people eligible for Medicare should enroll in Parts A and B. The key decision is how to handle medications (Part D) and whether to buy supplemental Medigap coverage.

Step 1: Determine if You Qualify for Part A without Premium

If you paid Medicare taxes for 10 years, you almost always want to enroll in Part A, since it's free.

Step 2: Evaluate Your Medication Situation

• Do you take prescription medications regularly?
• Are they expensive or affordable generics?
• Are your medications in the formulary of available Part D plans?
• Do you qualify for income-based assistance?

Step 3: Consider Your Overall Cost Situation

• Do you expect to need many doctor visits?
• Can you afford Medigap premium? (typically $200-400+ per month)
• Do you have savings to handle out-of-pocket costs?

Option A: Original Medicare plus Medigap plus Part D

Best for: People who want maximum flexibility and can afford the costs.

Components:

• Part A (typically no premium)
• Part B ($185/month standard in 2026)
• Medigap ($200-400+ per month depending on plan)
• Part D ($20-50+ per month depending on plan)

Total monthly cost: $400-650+ depending on plans chosen

Option B: Medicare Advantage

Best for: People on a limited budget or who want additional benefits included.

Components:

• All A, B, D coverage in one plan
• Premium typically $0-50/month
• Additional benefits like dental, vision, hearing
• Annual out-of-pocket maximum protects expenses

Total monthly cost: $0-50+ depending on plan

2026 Medicare Costs Summary Table

Component	2026	Notes
Part A Premium	$0 (typical)	Free for those who paid 10 years of taxes
Part A Deductible	$1,612	Per hospital benefit period
Part B Premium (Standard)	$185	Higher if high income (IRMAA up to $560)
Part B Deductible	$240	Annual
Part D Deductible	$585	Per calendar year, varies by plan
Part D Premium	$20-150	Average $40-50 by plan and state
Medigap Premium	$150-500+	Depends on Medigap plan chosen
Medicare Advantage Premium	$0-100	Many plans with $0 premium

Estimated 2026 Annual Total Expenses

Original Medicare plus Medigap plus Part D:

• First: $185 (B) + $300 (Medigap) + $35 (D) = $520/month = $6,240/year
• Plus out-of-pocket costs (copays, deductibles, uncovered services)
• Total estimated: $7,000-10,000+ per year depending on health

Medicare Advantage:

• Premium: $0-50/month = $0-600/year
• Out-of-pocket maximum typically $5,500-7,000/year
• Total estimated: $0-8,000/year if using services extensively

Ready to Enroll or Need Help?

If you're approaching age 65 or already eligible for Medicare, now is the time to act. Missing your initial enrollment period or special periods can result in lifetime penalties.

Licensed agents of Beneficios Medicare are fluent English speakers and can:

• Explain all your Medicare options in clear English
• Compare Part A, B, and D plans available in your area
• Verify that your doctors and medications are covered
• Help you with the enrollment process at no cost
• Answer questions anytime after you enroll

For more information on Medicare and specific state options, visit Medicare California to explore plans and options specific to California.

Conclusion

Medicare Parts A, B, and D don't have to be confusing. With proper guidance and professional help, you can make an informed decision that fits your health needs and budget.

Part A protects you against hospitalization costs. Part B covers your doctor visits and services. Part D ensures you can access your prescription medications at reasonable cost.

Remember: If you don't enroll during your eligible period, you'll face permanent penalties. The periods are short, typically only 7 months initially or 3 months each year after.

Susana Marcos LLC - Beneficios Medicare
(310) 597-9142
[email protected]
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