The Basic Shape of Medicare Coverage

Medicare has four parts, and each one covers different things. Part A covers hospital stays, skilled nursing care, and hospice. Part B covers doctor visits, outpatient care, and some preventive services. Part D covers prescription drugs. Part C, also called Medicare Advantage, is an alternative to Parts A and B offered by private insurance companies — it covers everything A and B do, but usually through a network of doctors and hospitals you have to use.

Most people turn 65 and get Part A and Part B automatically. Part D is separate and you choose it (or choose not to). Part C is optional — you can use the standard Medicare Parts A and B instead, or switch to a Part C plan. What gets paid depends on which parts you have and what the service is.

Medicare does not cover everything a doctor might recommend. It covers treatments that Medicare's medical review process has decided are medically necessary. It does not cover cosmetic procedures, most dental work, most vision care, hearing aids, or long-term custodial care in a nursing home. Understanding what falls into each category matters because the gap between what Medicare covers and what you might need can be large.

Key Takeaways

  • Part A covers hospital and skilled nursing stays; Part B covers doctor visits and outpatient services; Part D covers prescription drugs; Part C is a private alternative that covers A and B services through a network.
  • Medicare covers preventive services like screenings and vaccines at no cost to you, but does not cover routine dental, vision, or hearing care.
  • You pay a deductible before Medicare starts paying, then you pay a percentage of the cost (coinsurance) for most services, and there is an annual out-of-pocket maximum.
  • Supplemental insurance (Medigap) can cover costs Medicare does not, and many people buy it to reduce their share of the bill.
  • Some services require prior approval from Medicare before you receive them, so asking your doctor to check coverage before a procedure can prevent surprise bills.

What Part A Covers

Part A covers inpatient hospital care — that means you are admitted to the hospital and stay overnight. It covers the room, meals, nursing care, and most tests and procedures done while you are there. It also covers up to 100 days in a skilled nursing facility after a hospital stay of at least three days, as long as you need skilled care (like physical therapy or wound care) and not just help with daily activities.

Part A also covers hospice care if you have a terminal illness and your doctor says you have six months or less to live. Home health care is covered if you are homebound and need skilled nursing or therapy, ordered by your doctor. You do not pay a premium for Part A if you or your spouse paid Medicare taxes for at least 10 years while working.

Part A has a deductible — the amount you pay before Medicare starts paying. For 2024, that deductible is $1,676 per hospital stay. After you meet the deductible, Medicare pays all covered costs for days 1 through 60. For days 61 through 90, you pay a daily coinsurance amount. Beyond 90 days, you can use lifetime reserve days, but those cost more and are limited.

What Part B Covers

Part B covers doctor visits, whether in an office, clinic, or hospital outpatient department. It covers preventive services at no cost to you — things like annual wellness visits, cancer screenings, diabetes screenings, and vaccines. It covers lab work and imaging (X-rays, ultrasounds, CT scans) when ordered by your doctor. It covers physical therapy, occupational therapy, and speech therapy if medically necessary.

Part B also covers durable medical equipment — wheelchairs, walkers, oxygen equipment, and similar items — if your doctor prescribes them. It covers mental health services, including therapy and psychiatric care. Ambulance transport is covered if medically necessary.

Part B has a monthly premium (the amount varies by income) and an annual deductible. For 2024, the deductible is $240. After you meet the deductible, you typically pay 20 percent of the cost of services, and Medicare pays 80 percent. Some preventive services have no deductible and no coinsurance — you pay nothing.

What Part D Covers and How to Choose a Plan

Part D covers prescription drugs. You choose a Part D plan from private insurance companies, and each plan has a different list of drugs it covers (called a formulary) and different costs. Some drugs are covered with a low copay; others are not covered at all or are covered only if you try a cheaper drug first.

Part D has a monthly premium, an annual deductible, and then you pay a copay or coinsurance for each prescription. Once you and your plan have spent a certain amount on drugs in a year, you enter the "coverage gap" — a range where you pay a higher percentage of the cost. Once your out-of-pocket costs reach a yearly limit, catastrophic coverage kicks in and you pay a small copay for the rest of the year.

You can change your Part D plan once a year during the annual enrollment period (October 15 to December 7). If you do not choose a plan when you first become may be able to access, you may pay a penalty for as long as you have Medicare. If your income is low, you may be able to get help paying Part D costs through the Low-Income Subsidy program.

What Medicare Does Not Cover

Medicare does not cover dental care — not cleanings, not fillings, not extractions, not dentures. It does not cover routine vision care or eyeglasses, though it does cover cataract surgery and some eye disease treatment. It does not cover hearing aids or hearing exams for the purpose of fitting hearing aids, though it does cover some hearing-related medical care.

Medicare does not cover long-term care in a nursing home or assisted living facility. It covers skilled nursing care for a limited time after a hospital stay, but not custodial care (help with bathing, dressing, eating) in a facility. It does not cover most cosmetic procedures. It does not cover acupuncture, chiropractic care, or naturopathic medicine, though some acupuncture for chronic pain is covered under certain conditions.

Medicare does not cover routine foot care, though it does cover care for people with diabetes. It does not cover most over-the-counter medications. It does not cover travel outside the United States, except in limited circumstances in Canada and Mexico.

How Much You Pay: Deductibles, Coinsurance, and Out-of-Pocket Limits

Medicare is not free. You pay in three ways: premiums (monthly payments), deductibles (the amount you pay before Medicare starts paying), and coinsurance (a percentage of the cost after the deductible). Part A and Part B each have their own deductible. Part D plans have their own deductible and cost structure.

For 2024, Part A has a $1,676 deductible per hospital stay. Part B has a $240 annual deductible. After you meet the deductible, you pay 20 percent coinsurance for most Part B services. Part D deductibles vary by plan, usually between $0 and $505.

Medicare sets an annual out-of-pocket maximum for Part B — once you have paid that amount in deductibles and coinsurance, Medicare covers 100 percent of covered services for the rest of the year. For 2024, that maximum is $2,000. Part A does not have an out-of-pocket maximum in the same way, but your costs are capped by the number of days you stay in the hospital or skilled nursing facility.

Supplemental Insurance (Medigap) and Medicare Advantage

Many people buy Medigap (supplemental insurance) to cover costs that Medicare does not pay — the deductibles, coinsurance, and copays. Medigap is sold by private insurance companies and comes in standardized plans labeled A through N. Each plan covers a different set of gaps. Plan G, for example, covers the Part B deductible and the Part B coinsurance. Plan N covers most coinsurance but not the Part B deductible.

Medigap has a monthly premium on top of your Medicare premium. The cost varies by plan, by insurance company, and by your age and location. You can buy Medigap only during certain times — the best time is within six months of turning 65 or enrolling in Part B, because insurance companies cannot deny you or charge you more based on health problems during that window.

Medicare Advantage (Part C) is different. Instead of standard Medicare plus Medigap, you get all your coverage through one private insurance plan. Medicare Advantage plans often have lower premiums than Medigap, but they use networks — you usually have to see doctors in the plan's network, and you may need referrals to see specialists. Out-of-pocket costs can be lower or higher depending on the plan and your use of services.

When to Ask Your Doctor About Coverage

Before you have a procedure, test, or treatment, ask your doctor whether Medicare covers it. Some services require prior approval — Medicare has to say yes before you receive the service, or you may have to pay the full cost yourself. Your doctor's office can usually check this for you by calling Medicare or checking online.

If your doctor recommends something and you are not sure whether Medicare covers it, ask directly: "Does Medicare cover this? Will I have to pay out of pocket?" If the answer is yes, ask how much you will pay. If your doctor says Medicare probably will not cover it, ask whether there is an alternative that Medicare does cover.

If you receive a bill for a service you thought Medicare covered, do not ignore it. Call the provider and ask why you were billed. If you think the bill is wrong, you can file an appeal with Medicare. Keep all your paperwork — the bill, the explanation of benefits from Medicare, and any correspondence with the provider.

Frequently Asked Questions

Does Medicare cover preventive care?

Yes. Medicare Part B covers many preventive services at no cost to you — annual wellness visits, cancer screenings, diabetes screenings, bone density tests, cardiovascular screenings, and vaccines including flu, pneumonia, and shingles. You do not pay a deductible or coinsurance for these services. Your doctor has to order them as preventive care, not as treatment for a symptom you already have.

What happens if I need care outside the United States?

Medicare generally does not cover care outside the U.S. The main exception is emergency care in Canada or Mexico if you are traveling directly to or from Alaska. If you travel internationally and need care, you will likely pay out of pocket. Some Medigap plans cover emergency care abroad; some Medicare Advantage plans do as well. Check your plan before you travel.

Can I use any doctor with Medicare?

With standard Medicare (Parts A and B), you can see any doctor who accepts Medicare. Most doctors do, but some do not. With Medicare Advantage (Part C), you usually have to use doctors in the plan's network, though some plans allow out-of-network care at a higher cost. Always ask a new doctor whether they accept your type of Medicare before you schedule an appointment.

What if I cannot afford my Medicare costs?

If your income is low, you may be able to get help through the Medicare Savings Program (which helps pay premiums and deductibles) or the Low-Income Subsidy program (which helps pay Part D costs). Your state Medicaid office runs the Medicare Savings Program. You can also call 1-800-MEDICARE to ask about programs you might be able to use.

Do I have to enroll in Part D when I turn 65?

You do not have to, but if you do not enroll when you first become may be able to access and you do not have other drug coverage, you will pay a penalty for as long as you have Medicare. The penalty is added to your Part D premium each month. If you do not take prescription drugs, you can skip Part D without penalty, but if you start taking drugs later, you will owe the penalty retroactively.