Medicare in 2026: what Parts A, B, C, and D actually pay

The four parts of Medicare are not four products you choose between. Part A and Part B are the program itself, together called Original Medicare. Part D is prescription drug coverage bolted on separately, through private plans. Part C, Medicare Advantage, is not extra coverage at all; it is a different delivery mechanism for the same Part A and Part B entitlement, run by a private insurer under contract to CMS.

Getting that structure straight settles most of the confusion, because almost every decision after 65 is really a question about how the A and B entitlement gets delivered and what covers the parts of it Medicare leaves open.

Part A: hospital coverage most people never pay a premium for

Part A covers inpatient hospital stays, skilled nursing facility care, hospice, inpatient rehabilitation, and some home health care. CMS reports that roughly 99 percent of beneficiaries pay no Part A premium, because they or a spouse have at least 40 quarters of Medicare-covered employment as determined by the Social Security Administration.

The people who fall short of 40 quarters buy in. In 2026 that costs $311 a month for those with 30 to 39 quarters, and $565 a month for those with fewer than 30. Those figures rose $26 and $47 respectively from 2025.

The detail that surprises people is that the Part A deductible is not annual. It applies per benefit period. A benefit period starts on admission and ends after 60 consecutive days out of a hospital or skilled nursing facility. Someone admitted in February and again in November of the same year can pay the deductible twice.

Read the ladder rather than the headline. The first 60 days cost the deductible and nothing more. Days 61 to 90 add a daily charge. After 90 days a beneficiary draws on 60 lifetime reserve days at roughly double the rate, and those do not renew. Skilled nursing is fully covered for the first 20 days of a qualifying stay and then charges daily from day 21 through 100.

Part B: the premium almost everyone pays, and the gap nobody mentions

Part B covers physician services, outpatient hospital care, durable medical equipment, certain home health services, and most preventive care. The standard monthly premium is $202.90 in 2026, up $17.90 from $185.00 in 2025. The annual deductible is $283, up $26 from $257.

CMS attributes the increase mainly to projected price changes and assumed utilization growth. It also states in the same fact sheet that without action taken on spending for skin substitutes, the premium increase would have been about $11 a month higher, and that changes finalized in the 2026 Physician Fee Schedule are expected to cut that spending by 90 percent. Whatever one makes of the policy, it is a useful reminder that the Part B premium is a direct function of program spending rather than a negotiated retail price.

After the deductible, Part B generally pays 80 percent and the beneficiary owes the remaining 20 percent. That 20 percent has no annual ceiling. This is the single most important structural fact about Original Medicare, and it is the reason a supplemental policy or an Advantage plan exists at all. A long cancer course or a complex surgical year produces a 20 percent share with no stopping point.

Higher incomes pay more, and the surcharge looks back two years

Since 2007 the Part B premium has been income-related. CMS reports these income-related monthly adjustment amounts, universally called IRMAA, affect roughly 8 percent of people with Part B. The brackets for 2026 start above $109,000 in modified adjusted gross income for an individual filer and above $218,000 for a joint filer.

The brackets are cliffs, not slopes. A dollar of income over a threshold moves the whole premium to the next tier for the year. And the income used is generally the return from two years earlier, so a one-off event such as selling a property or converting a retirement account shows up as a surcharge long after the money was spent. Social Security has a process for requesting a reduction after certain life-changing events, and that request is made to SSA rather than to Medicare.

Part D: separate, private, and standardised only in value

Part D is prescription drug coverage sold by private plans under CMS rules. CMS defines a standard benefit every plan must at least match in value, and the 2026 version has three phases: a deductible of up to $615, then an initial coverage phase where the enrollee pays 25 percent coinsurance, then a catastrophic phase with no further cost sharing once out-of-pocket spending reaches $2,100.

That $2,100 ceiling is new in the historical sense. It began as a $2,000 cap in 2025 under the Inflation Reduction Act and is indexed annually to growth in average Part D drug spending. Before 2025 there was no hard annual limit on what a Part D enrollee could pay. The mechanics of that benefit, and the penalty for skipping it, are involved enough that we treat them separately.

Part D carries its own income-related surcharge on the same 2026 income brackets as Part B, ranging from $14.50 to $91.00 a month on top of whatever the plan charges. CMS reports about 8 percent of Part D enrollees pay it.

Part C: the same entitlement, delivered differently

A Medicare Advantage plan is a private plan paid a capitated amount by CMS to deliver the Part A and Part B benefit. Enrollees keep paying the Part B premium. The plan must cover everything Original Medicare covers, and most bundle Part D and add benefits Medicare does not cover at all.

Two structural differences do the work. Advantage plans have provider networks and use prior authorisation, so access runs through the plan’s rules rather than through any provider that accepts Medicare. And Advantage plans carry a maximum out-of-pocket limit on Part A and B services, which Original Medicare alone does not.

Having spent eighteen years on the industry side of consumer marketing and lead generation, I will say plainly that this is the most heavily marketed decision in American consumer finance, and that the marketing rarely frames it as what it is: a trade between an out-of-pocket ceiling and freedom of provider choice. Neither side of that trade is universally correct. It depends on health status, on how often somebody travels or splits the year between states, and on whether their existing doctors are in the network.

Row four is the one that quietly narrows future options. Medigap policies are guaranteed issue only during limited windows, most commonly the six months beginning when someone is 65 and enrolled in Part B. Outside those windows, and outside the states that legislate otherwise, an insurer may medically underwrite. Somebody who takes an Advantage plan at 65 and wants Original Medicare plus Medigap at 72 may find the supplemental half of that plan is no longer available on the same terms.

What Medicare does not cover

Original Medicare does not cover routine dental, routine vision, hearing aids, or long-term custodial care. The last of those is the largest exposure and the least understood. Medicare pays for skilled nursing only after a qualifying hospital stay and only up to 100 days per benefit period, with daily coinsurance from day 21. Ongoing help with dressing, bathing and eating is custodial care, and it sits outside the program entirely.

Many Advantage plans add dental, vision and hearing allowances. Those are plan benefits rather than Medicare benefits, which means they are defined by the plan, capped by the plan, and can change at the annual renewal.

The order to think about it in

Establish Part A and Part B first, because that is the entitlement and the enrollment timing carries lifelong penalties if it is missed. Then decide how it gets delivered: Original Medicare, usually paired with a supplemental policy and a Part D plan, or a single Advantage plan. Then choose drug coverage to match the specific prescriptions somebody actually takes, since formularies differ far more than premiums do.

Every figure above comes from the CMS fact sheet published 14 November 2025 and the Final CY 2026 Part D Redesign Program Instructions. Plan-level premiums are not in this article and will not be, because they vary by county and change every year. The official plan comparison tool at medicare.gov is the neutral place to check those, and it is the same data every marketer draws from.

Questions readers actually ask

Is Part A really free?

The premium is zero for roughly 99 percent of beneficiaries, who earned it through 40 quarters of Medicare-covered employment. The care is not free. In 2026 an inpatient stay still carries a $1,736 deductible per benefit period, and that deductible can apply more than once in a calendar year.

Does Original Medicare cap what I can pay in a year?

No. After the Part B deductible, the 20 percent coinsurance continues without an annual limit. That absence is the reason supplemental policies and Medicare Advantage plans exist, and it is the most important number that does not appear on any premium comparison.

Is Medicare Advantage a replacement for Medicare?

No. It is the same Part A and Part B entitlement delivered by a private plan under contract to CMS. Enrollees stay in Medicare and keep paying the Part B premium. What changes is the network, the prior authorisation rules, and the presence of an out-of-pocket ceiling.

Why is my Part B premium higher than the standard amount?

Most likely the income-related monthly adjustment amount, which CMS says applies to about 8 percent of Part B enrollees. It is generally based on the tax return from two years earlier, so it can reflect income that no longer exists. Social Security accepts requests for reconsideration after certain life-changing events.

Written by

Keith Guirao

Founder & Editor, ConsumersWeek

18+ years in consumer marketing and lead generation across insurance, personal finance, and home services. ConsumersWeek explains how these products are priced and sold so you can evaluate them with the same information the industry has.

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