If you are new to Medicare, the alphabet soup of letters and acronyms can feel like a foreign language. Part A. Part B. Medigap. Formulary. MOOP. Most of these terms are simpler than they sound. Here are the 10 you really need to know.
1. Part A (Hospital Insurance)
Medicare Part A covers inpatient care. Hospital stays, skilled nursing facilities after a qualifying hospital stay, home health care, and hospice care. Most people do not pay a monthly premium for Part A because they (or their spouse) paid Medicare taxes for at least 10 years through their working life.
You still pay a deductible for each benefit period if you are admitted to the hospital. In 2026, the Part A deductible is about $1,676.
2. Part B (Medical Insurance)
Part B covers outpatient care. Doctor visits, lab tests, outpatient surgery, durable medical equipment, mental health care, and most preventive care. Almost everyone on Medicare pays a Part B premium each month. For 2026, the standard Part B premium is $202.90 per month.
After a yearly deductible (about $257 in 2026), Part B pays 80% of the approved amount and you pay the other 20%.
3. Part C (Medicare Advantage)
Part C, also called Medicare Advantage, is a private plan that replaces Original Medicare. The plan still has to cover everything Original Medicare covers, plus most plans add benefits like dental, vision, hearing, and prescription drugs. You still pay your Part B premium, but most Medicare Advantage plans have a $0 monthly premium beyond that.
The trade-off is that Medicare Advantage plans use networks of doctors and hospitals, and often require prior authorization for certain services.
4. Part D (Prescription Drug Plans)
Part D is the prescription drug part of Medicare. You buy it as a stand-alone plan to go with Original Medicare, or it comes bundled with most Medicare Advantage plans. Each Part D plan has its own list of covered drugs called a formulary. Premiums range from about $10 to $90 a month, depending on the plan and your area.
For more, see our Part D plan guide.
5. Medigap (Medicare Supplement Insurance)
Medigap, also called a Medicare Supplement, is a separate policy that helps pay your share of costs under Original Medicare. It fills the 20% gap that Part B leaves you with. The most popular Medigap plans today are Plan G and Plan N. Medigap is sold by private insurers but is regulated by the federal government. The benefits are the same across carriers; only the price changes.
6. Premium
The premium is the amount you pay each month to have Medicare or a Medicare-related plan. You may pay premiums for Part B, Part D, and any Medicare Advantage or Medigap plan you choose. Most people pay Part B and Part D premiums no matter which path they take. Medicare Advantage and Medigap premiums depend on the plan.
7. Deductible
The deductible is the amount you have to pay yourself before Medicare starts paying. Original Medicare has a Part A hospital deductible per benefit period and a yearly Part B deductible. Part D plans have their own deductible, often $0 to $590 for 2026, depending on the plan.
8. Copay and Coinsurance
A copay is a flat dollar amount you pay for a service, like $20 for a doctor visit or $40 for a specialist. Coinsurance is a percentage, like the 20% Part B coinsurance you owe after meeting your deductible. Medicare Advantage plans usually use copays; Original Medicare uses coinsurance.
9. MOOP (Maximum Out-of-Pocket)
The MOOP is the most you can pay out of pocket in a year for covered services on a Medicare Advantage plan. After you hit it, the plan pays 100% of covered care for the rest of the year. For 2026, the MOOP cannot be more than $9,250 for in-network services, but most plans set theirs lower.
Original Medicare does not have a MOOP. That is why people on Original Medicare usually buy a Medigap plan to cap their exposure.
10. Formulary
A formulary is the list of drugs your Part D or Medicare Advantage plan covers. Drugs are grouped into tiers, with lower tiers having lower copays. Your plan can change the formulary each year, so the drug you take this year may be in a different tier (or off the list completely) next year.
This is why the Annual Notice of Change letter you get in late September matters. Always check the formulary before you decide to keep or switch your plan.
Bonus terms worth knowing
- IRMAA: an income-related surcharge that higher-income members pay on top of their Part B and Part D premiums. See our IRMAA guide for the income brackets.
- AEP: the Annual Enrollment Period (October 15 to December 7), when you can change plans for next year.
- IEP: your Initial Enrollment Period, the 7-month window around your 65th birthday.
- SEP: a Special Enrollment Period triggered by a qualifying life event.
- ANOC: the Annual Notice of Change letter your plan sends every September.
The bottom line
You do not need to memorize all of this. But knowing what each term means will save you a lot of confusion when you are reading plan documents or talking to a Medicare representative. Most of these words come up in every Medicare conversation, and once they click, the system makes a lot more sense.