What Medicare Covers

Medicare is a federal health insurance program for people 65 and older, some younger people with disabilities, and people with end-stage renal disease. It has four parts, and each covers different services. Part A covers hospital stays, skilled nursing care, hospice, and some home health services. Part B covers doctor visits, outpatient care, lab tests, and medical equipment. Part D covers prescription drugs. Part C (Medicare Advantage) is an alternative to Parts A and B offered by private insurers.

Part A typically has no monthly premium if you or your spouse paid Medicare taxes for at least 10 years while working. Part B has a monthly premium that changes each year — in 2024 it was $164.90 for most people, but higher earners pay more. Part D premiums vary by plan. Part C premiums depend on the plan you choose.

Medicare pays a percentage of covered services after you meet your deductible. For Part A hospital stays, you pay a deductible per benefit period (not per day). For Part B, you pay 20 percent of the approved amount after meeting your annual deductible. The exact amounts change yearly.

Key Takeaways

  • Medicare Part A covers hospital stays and skilled nursing; Part B covers doctor visits and outpatient services; Part D covers prescription drugs; Part C is a private alternative combining A and B.
  • You typically become may be able to access at 65, but you must sign up during your enrollment window or face permanent penalties on your premiums.
  • Medicare does not cover dental, vision, hearing aids, or long-term custodial care — you may need separate insurance or to pay out of pocket for these.
  • You pay deductibles, copayments, and coinsurance; the exact amounts depend on which parts you have and which plan you choose.
  • If your income is below certain thresholds, you may may have access to for programs that help pay your Medicare premiums and cost-sharing.

What Medicare Does Not Cover

Medicare has significant gaps. It does not cover dental work, eye exams, eyeglasses, or hearing aids — these are considered separate services. It does not cover long-term custodial care in a nursing home or assisted living facility, which is where most people spend money on care as they age. It does not cover routine foot care, cosmetic surgery, or most acupuncture.

Medicare also does not cover care outside the United States except in limited circumstances (Canada, Mexico, and some Caribbean islands in emergencies). It does not cover experimental treatments or treatments deemed not medically necessary by Medicare's rules. If you travel abroad for care, you pay the full cost yourself.

Many people buy a Medigap policy (supplemental insurance) to cover some of these gaps, particularly the copayments and coinsurance that Medicare leaves you responsible for. Medigap policies are sold by private insurers and have their own premiums and rules.

How to Sign Up for Medicare

You become may be able to access for Medicare the month you turn 65. You should sign up during your Initial Enrollment Period, which runs for seven months: three months before the month you turn 65, the month you turn 65, and three months after. If you sign up late, you may pay a permanent penalty on your Part B and Part D premiums for as long as you have Medicare.

You can sign up online at Medicare.gov, by phone at 1-800-MEDICARE, or in person at your local Social Security office. You will need your Social Security number, proof of citizenship or legal residency, and information about your current health coverage. If you are already receiving Social Security benefits, you may be signed up automatically, but you should verify this.

If you choose Part C (Medicare Advantage) instead of Original Medicare (Parts A and B), you sign up through the private insurer offering the plan. The annual enrollment period for changing plans runs from October 15 to December 7 each year.

Medicare Costs and How They Work

Medicare costs include premiums, deductibles, copayments, and coinsurance. Your Part A deductible in 2024 was $1,632 per benefit period for hospital stays. Your Part B deductible was $240 per year. After you meet the deductible, you pay 20 percent of the approved amount for most services. For hospital stays under Part A, you pay a daily copayment after the first 60 days.

Part D (prescription drug coverage) has a deductible, a copayment or coinsurance for each drug, and a coverage gap called the "donut hole." Once you and your insurer have spent a certain amount on drugs in a year, you enter the donut hole and pay a higher percentage of drug costs until you reach a catastrophic coverage threshold. The exact amounts change each year.

If your income is below 150 to 200 percent of the federal poverty line (depending on the program), you may may have access to for Extra Help with Part D costs or Medicaid to cover some of your Medicare cost-sharing. Your state Medicaid office or your local Area Agency on Aging can tell you whether you may have access to.

Original Medicare Versus Medicare Advantage

Original Medicare is Parts A and B run by the federal government. You can see any doctor or hospital that accepts Medicare. You have more choice but higher out-of-pocket costs because you pay coinsurance (usually 20 percent) for most services. You must buy Part D separately if you want prescription drug coverage, and many people also buy Medigap to cover the gaps.

Medicare Advantage (Part C) is offered by private insurers and combines Parts A, B, and usually D into one plan. Premiums are often lower or zero, and out-of-pocket costs are capped. However, you must use doctors and hospitals in the plan's network (except in emergencies), and you may need prior authorization for certain services. Plans vary widely in cost and coverage, so comparing plans in your area is essential.

Neither Original Medicare nor Medicare Advantage covers dental, vision, or hearing. Some Medicare Advantage plans offer limited dental or vision benefits, but these are usually not comprehensive. You can switch between Original Medicare and Medicare Advantage during the annual enrollment period, but switching back to Original Medicare after choosing Advantage can be difficult if you have pre-existing conditions.

Common Mistakes When Signing Up

The most costly mistake is missing your Initial Enrollment Period. If you do not sign up by the end of the three-month window after you turn 65, you pay a permanent 10 percent penalty on your Part B premium for each full year you were may be able to access but not enrolled. This penalty stays with you for life. The same applies to Part D: missing the important date means a permanent penalty on your drug plan premium.

Another common mistake is not realizing that Medicare Advantage plans change every year. Your plan's network, copayments, and formulary (list of covered drugs) can change on January 1. You should review your plan each October during the annual enrollment period and switch if a better option is available.

A third mistake is not understanding that Original Medicare does not have an out-of-pocket maximum. You can spend unlimited amounts on coinsurance if you have a serious illness or injury. This is why many people buy Medigap — to cap their costs. Medicare Advantage plans do have an out-of-pocket maximum, which is a trade-off for having to use their network.

Getting Help Understanding Your Options

Medicare.gov has a plan comparison tool where you can enter your drugs and doctors and see which plans cover them in your area. You can also call 1-800-MEDICARE to speak with a representative who can answer questions about coverage and costs.

Your State Health Insurance information Program (SHIP) offers free, unbiased counseling about Medicare. You can find your local SHIP by calling 1-800-MEDICARE or visiting the Eldercare Locator at 1-800-677-1116. SHIP counselors can review your specific situation and help you understand your options.

If you are struggling to afford Medicare premiums or cost-sharing, ask your doctor's office or local Area Agency on Aging about programs that help pay these costs. Some are run by Medicare, some by your state, and some by nonprofits. may be able to access depends on your income and assets.

Frequently Asked Questions

Do I have to sign up for Medicare at 65 if I am still working?

If you or your spouse are still working and have health coverage through your employer, you may be able to delay signing up for Part B without penalty. However, you should still sign up for Part A at 65 because it has no premium and covers hospital care. Contact Social Security or Medicare to confirm your situation before the important date passes.

Can I change my Medicare plan after January 1?

You can change plans only during the annual enrollment period (October 15 to December 7) or if you have a may have access to life event such as moving, losing other coverage, or getting married. Outside these windows, you are locked into your plan for the year.

What happens if I cannot afford my Medicare premiums?

If your income is low, you may may have access to for Medicaid, Extra Help with Part D, or a Medicare Savings Program that pays your premiums and cost-sharing. Contact your state Medicaid office or your local Area Agency on Aging to learn what you may may have access to for based on your income and assets.

Does Medicare cover physical therapy or rehabilitation?

Medicare Part B covers physical therapy and occupational therapy ordered by a doctor for a medical condition. Part A covers rehabilitation services during a hospital stay or in a skilled nursing facility. However, Medicare limits the number of visits or the amount it will pay, and you must meet your deductible and pay coinsurance.

Can I use my Medicare outside the United States?

Original Medicare does not cover care outside the U.S. except in limited emergencies in Canada, Mexico, and some Caribbean islands. Medicare Advantage plans may offer some coverage abroad, but it is usually limited. If you travel internationally, consider buying a travel health insurance policy that covers emergency care.