Medicare Part A vs Part B

Medicare Part A is often called hospital insurance because its primary function is covering inpatient care. When you are admitted to a hospital as an inpatient, Part A pays for your room, meals, nursing care, and most other hospital services. Part A also covers care in a skilled nursing facility (SNF) after a qualifying hospital stay of at least 3 days, hospice care for terminal illness, and some home health care when medically necessary.

The 2026 Part A deductible is $1,736 per benefit period, not per year. A benefit period begins the day you are admitted as an inpatient and ends after you have been out of the hospital or SNF for 60 consecutive days. If you are readmitted after 60 days, a new benefit period begins and a new deductible applies. There is no limit to the number of benefit periods you can have in a year.

After the deductible, Part A pays 100% of covered hospital costs for days 1 through 60. From day 61 to day 90, you pay $434 per day in 2026. Beyond 90 days, you draw from a 60-day lifetime reserve at $868 per day. Once lifetime reserve days are exhausted, you pay all costs. This cost structure is one reason many beneficiaries choose a Medigap plan to cover the gaps.

Most people pay $0 for Part A because they or their spouse paid Medicare payroll taxes for at least 40 quarters (10 years). If you have 30 to 39 quarters, the 2026 premium is $284/month. With fewer than 30 quarters, the premium is $565/month.

Medicare Part B covers the medical services you receive outside of a hospital stay. This includes visits to your primary care doctor and specialists, outpatient surgery, emergency room visits when not admitted, lab tests, X-rays, physical therapy, mental health services, and durable medical equipment like wheelchairs and walkers. Part B also covers many preventive services at no cost, including an annual wellness visit, flu shots, mammograms, and colonoscopies.

Unlike Part A, Part B requires a monthly premium. The standard 2026 Part B premium is $202.90 per month. However, if your income exceeds certain thresholds, you pay an IRMAA surcharge on top of the standard premium. IRMAA is based on your tax return from two years prior. For 2026, IRMAA surcharges begin for individuals with income above $106,000 and couples above $212,000.

After meeting the $257 annual Part B deductible, Medicare pays 80% of approved costs and you pay the remaining 20% coinsurance. There is no out-of-pocket maximum under Original Medicare, which means a serious illness could result in significant costs. Many beneficiaries add a Medigap plan to cover the 20% coinsurance and eliminate exposure to unlimited costs.

Part B is optional, but most people should enroll when first eligible. If you delay Part B enrollment without qualifying coverage from an employer, you will face a permanent 10% premium penalty for each 12-month period you went without coverage.

Together, Part A and Part B form what is called Original Medicare. Original Medicare is the federal health insurance program administered by CMS. It is a fee-for-service program, meaning you can see any doctor or hospital that accepts Medicare, anywhere in the country, without needing a referral.

Original Medicare does not cover everything. It does not include routine dental, vision, or hearing care. It does not cap your out-of-pocket costs. And it does not cover prescription drugs (that is what Medicare Part D is for). Because of these gaps, most beneficiaries add either a Medigap plan to cover cost-sharing under Original Medicare or switch to a Medicare Advantage plan, which replaces Original Medicare and often includes dental, vision, hearing, and drug coverage.

When you have both Part A and Part B, Medicare coordinates coverage based on where you receive care. If you are admitted to a hospital, Part A is the primary payer. If you see a doctor in an outpatient setting, Part B is the primary payer. Some services, like home health care, can be covered by either part depending on the circumstances.

Most people are automatically enrolled in both Part A and Part B when they turn 65 if they are already receiving Social Security benefits. If you are not receiving Social Security at 65, you must actively enroll during your Initial Enrollment Period, which is a 7-month window that begins 3 months before your 65th birthday month and ends 3 months after.

If you are still working at 65 and covered by employer health insurance, you may be able to delay Part B without penalty. The key rule: the employer must have 20 or more employees for the employer plan to be considered primary coverage. If your employer has fewer than 20 employees, Medicare becomes primary and you should enroll in Part B on time to avoid penalties.

If you miss your Initial Enrollment Period and do not have qualifying coverage, you can enroll during the General Enrollment Period (January 1 through March 31 each year), with coverage starting July 1. Late enrollment penalties will apply. A Special Enrollment Period is available if you are losing employer coverage, giving you 8 months to enroll in Part B without penalty.