When it comes to Medicare, the alphabet matters. Parts A, B, C, and D each cover different areas of your healthcare needs — and understanding the difference between them is the first step to choosing coverage that actually works for you.
Part A — Hospital Insurance
Medicare Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health services. Most people get Part A premium-free if they (or their spouse) paid Medicare taxes for at least 10 years while working.
Part A doesn't cover everything about a hospital stay, though. It has a $1,736 deductible per benefit period in 2026, plus coinsurance for longer stays. Understanding these cost-sharing rules matters when you're comparing Medicare options.
Part B — Medical Insurance
Medicare Part B covers outpatient services: doctor visits, preventive care, lab tests, durable medical equipment, some home health services, and certain medications administered in a clinical setting. Part B has a standard monthly premium of $202.90 and an annual deductible of $283 in 2026, as confirmed in the Federal Register notice announcing 2026 Part B rates (Document #2025-20251), after which Medicare pays 80% of approved costs.
That 20% coinsurance with no annual cap is one of the biggest gaps in Original Medicare — it's the main reason people look at Medigap (supplement) coverage.
Part C — Medicare Advantage
Medicare Part C, known as Medicare Advantage, is an alternative way to receive your Medicare benefits. Instead of getting Part A and Part B coverage through the federal government, you enroll in a private plan approved by Medicare. Most Advantage plans also include Part D drug coverage, plus extras like dental, vision, hearing, and fitness benefits.
Medicare Advantage plans have annual out-of-pocket maximums — something Original Medicare doesn't have. However, they use provider networks (HMO or PPO), so you need to confirm your doctors are covered.
In the La Crosse area, confirming that your providers at Gundersen Health System or Mayo Clinic Health System are in-network is an important step before enrolling in any Advantage plan.
Part D — Prescription Drug Coverage
Medicare Part D covers prescription drugs. You can get it as a standalone plan alongside Original Medicare and Medigap, or it's often bundled into a Medicare Advantage plan. Part D plans have formularies (lists of covered drugs), and the cost of your medications depends on which tier each drug falls on.
For 2026, there is an annual out-of-pocket cap of $2,100 for covered drugs — once you hit it, covered drugs cost you nothing for the rest of the year. This is a significant protection for people who take expensive medications.
Enrolling late in Part D when you're first eligible — without other creditable drug coverage — triggers a permanent penalty of 1% of the national base beneficiary premium for every month you went without coverage. It's one of the most common and costly mistakes we see.
Putting It All Together
There are two main paths in Medicare:
- Original Medicare (Part A + Part B) + a Medigap policy + a standalone Part D plan — Maximum flexibility (any provider that accepts Medicare, nationwide), higher monthly cost, no network restrictions.
- Medicare Advantage (Part C) — Often lower or $0 premium, includes drug coverage and extras, but uses a provider network. Total cost depends heavily on how much care you use.
Neither path is right for everyone. The best choice depends on your doctors, your prescriptions, your health, and your budget.
Not sure which path is right for you? We compare both options side by side for your specific situation — doctors, drugs, and budget — at no cost to you. Call or text (608) 799-8434 or schedule a free conversation.
Frequently Asked Questions
What's the difference between Part A, B, C, and D?
Original Medicare is Part A (inpatient hospital, skilled nursing, hospice) and Part B (doctor visits, outpatient care, preventive services). Part C — Medicare Advantage — bundles A and B, usually with drug coverage, through a private plan. Part D is standalone prescription coverage. Most people on Original Medicare add a Part D plan and often a Medicare Supplement.
Do I have to pay a premium for Part A?
Most people pay $0. If you or your spouse paid Medicare taxes for at least 10 years (40 quarters), you qualify for premium-free Part A. Fewer quarters means you can buy Part A, but a premium applies.
How much does Part B cost in 2026?
The standard Part B premium is $202.90/month in 2026, with a $283 annual deductible. After the deductible, Part B covers 80% of approved services and you pay the remaining 20%. Higher earners pay more through IRMAA.
Is there a limit on what I pay out of pocket with Original Medicare?
No — Parts A and B have no annual out-of-pocket maximum on their own, which is why many western Wisconsin beneficiaries add a Medicare Supplement (in Wisconsin, the standardized Basic Plan plus optional riders) to cap exposure. Part D is different: as of 2026, covered drug costs are capped at $2,100 for the year.
What happens if I don't sign up when first eligible?
You may owe a lifelong late-enrollment penalty. Part B adds 10% per full 12-month period you could have enrolled but didn't, for as long as you have Part B. Part D adds 1% of the national base drug premium per uncovered month. Enrolling during your Initial Enrollment Period avoids both.
Sources
- Medicare.gov. What Does Medicare Cost? medicare.gov
- Centers for Medicare & Medicaid Services (CMS). Medicare Deductible, Coinsurance, and Premium Rates for CY 2026 (MLN MM14279). cms.gov
- Federal Register. Medicare Program; Medicare Part B Monthly Actuarial Rates, Premium Rates, and Annual Deductible Beginning January 1, 2026 (Document #2025-20251, published 2025-11-19). federalregister.gov
- Centers for Medicare & Medicaid Services (CMS). Final CY 2026 Part D Redesign Program Instructions. cms.gov
- Medicare.gov. Compare Original Medicare & Medicare Advantage. medicare.gov
- Medicare.gov. Avoid Late Enrollment Penalties. medicare.gov
Compliance disclosures: We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Assistance Program (SHIP) to get information on all of your options. Not affiliated with or endorsed by the U.S. government or the federal Medicare program. This article is for general information only and is not medical, insurance, tax, or legal advice. Eligibility, costs, and plan availability may change; confirm current details at Medicare.gov. Consult a licensed agent. Hougom Insurance Agency is a licensed independent insurance agency (NPN 20742808). Plan year 2026 figures used throughout.