Medicare covers hospital stays, doctor visits, and some preventive care, but not everything—and you will pay part of the cost for most services

Medicare is not free. It covers a significant portion of your healthcare costs, but the program splits expenses between what Medicare pays and what you pay. The amount Medicare covers depends on which part of Medicare you have, which service you need, and whether you have seen your deductible yet that year. Understanding these splits helps you plan for medical costs and know what to expect when you get a bill.

The basic rule: Medicare Part A (hospital insurance) covers inpatient hospital care, skilled nursing facility stays, and some home health services. Medicare Part B (medical insurance) covers doctor visits, outpatient care, and some equipment. Part D covers prescription drugs. But in each case, you share the cost. Medicare pays its portion; you pay yours through deductibles, copayments, and coinsurance.

Key Takeaways

  • Medicare Part A covers hospital stays after you pay a deductible ($1,600 in 2024, though this amount changes yearly), then Medicare covers most costs for the first 60 days.
  • Medicare Part B covers doctor visits and outpatient services after you pay a monthly premium and annual deductible, then you typically pay 20 percent of the cost.
  • Medicare does not cover dental, vision, hearing aids, or long-term custodial care, though some Medicare Advantage plans include limited dental and vision benefits.
  • Prescription drug coverage through Part D requires a separate premium and leaves you responsible for a portion of drug costs depending on which tier your medication falls into.
  • Medigap (supplemental insurance) and Medicare Advantage are two ways to reduce your out-of-pocket costs, but each works differently and covers different services.

What Medicare Part A Covers and What You Pay

Part A covers inpatient hospital care. When you are admitted to a hospital, Medicare pays for your room, meals, nursing care, and most tests and procedures. You pay a deductible first—$1,600 in 2024—before Medicare starts paying. After you meet that deductible, Medicare covers all approved costs for days 1 through 60 of your hospital stay.

Days 61 through 90 are called "coinsurance days." Medicare still covers most of the cost, but you pay a daily amount ($400 per day in 2024) for each day you stay. If you stay longer than 90 days, you can use your "lifetime reserve days"—60 additional days Medicare will help pay for, though you pay a higher daily amount ($800 per day in 2024). After your lifetime reserve days run out, you pay the full cost.

Part A also covers skilled nursing facility care (not regular nursing home care) for up to 100 days per benefit period if you were hospitalized first. You pay nothing for the first 20 days. Days 21 through 100, you pay a daily coinsurance amount ($200 per day in 2024). Part A covers some home health services if you are homebound and a doctor orders the care—you pay nothing for this, though you may pay 20 percent of the cost of equipment.

What Medicare Part B Covers and What You Pay

Part B covers doctor visits, outpatient surgery, diagnostic tests, and durable medical equipment like wheelchairs and oxygen. You pay a monthly premium for Part B (the standard amount is $164.90 in 2024, though it is higher if your income is above a certain level). You also pay an annual deductible ($240 in 2024) before Medicare starts paying its share.

After you meet your deductible, Medicare typically pays 80 percent of the approved amount for most services, and you pay 20 percent. This is called coinsurance. For example, if a doctor visit costs $100 and Medicare's approved amount is $80, Medicare pays $64 (80 percent of $80) and you pay $16 (20 percent of $80). If the doctor charges more than Medicare's approved amount, you may owe the difference—unless the doctor has agreed not to charge more than Medicare allows.

Some preventive services—like annual wellness visits, cancer screenings, and vaccinations—are covered at no cost to you after you meet your deductible. Part B does not cover routine dental care, vision exams for glasses or contacts, hearing aids, or most prescription drugs (those are covered under Part D).

What Medicare Part D Covers and What You Pay

Part D is prescription drug coverage. You choose a Part D plan from private insurance companies, and each plan has its own list of covered drugs, called a formulary. You pay a monthly premium that varies by plan. You also pay an annual deductible (up to $545 in 2024, depending on the plan).

After you meet your deductible, you pay a copayment or coinsurance for each prescription. The amount depends on which "tier" your drug is on—generic drugs are usually the cheapest tier, brand-name drugs cost more, and specialty drugs (for conditions like cancer or rheumatoid arthritis) are the most expensive. As you spend more on drugs throughout the year, you move through different cost-sharing stages, and your out-of-pocket costs change.

Part D has a coverage gap called the "donut hole." Once you and your plan have spent a combined $5,030 on drugs in 2024, you enter the gap and pay a higher percentage of drug costs until your out-of-pocket spending reaches $7,050. After that, catastrophic coverage kicks in and you pay only a small copayment for the rest of the year. These dollar amounts change each year.

Services Medicare Does Not Cover

Medicare does not cover dental care, including cleanings, fillings, and extractions. It does not cover routine vision exams, eyeglasses, or contact lenses. Hearing aids and hearing exams are not covered. Long-term custodial care—such as help with bathing, dressing, and eating in a nursing home or at home—is not covered by Medicare, though it may be covered by Medicaid if you meet income and asset limits.

Medicare also does not cover cosmetic surgery, most acupuncture, or routine foot care (though it covers foot care if you have diabetes). Overseas medical care is not covered except in limited circumstances. If you need any of these services, you pay the full cost yourself, or you may have coverage through a supplemental insurance plan (Medigap) or a Medicare Advantage plan that includes these benefits.

How Medigap and Medicare Advantage Change What You Pay

Medigap (supplemental insurance) is sold by private insurance companies and is designed to pay some of the costs that Original Medicare does not—like deductibles, coinsurance, and copayments. There are ten standardized Medigap plans, labeled A through N. Each plan covers a different combination of costs. For example, Plan G covers your Part B deductible and coinsurance, while Plan N covers coinsurance but not the deductible. You pay a monthly premium for Medigap on top of your Part B premium, but in return, your out-of-pocket costs for covered services drop significantly.

Medicare Advantage (Part C) is an alternative to Original Medicare. It is offered by private insurance companies and must cover everything Original Medicare covers, but it often includes extra benefits like dental, vision, or hearing. However, Medicare Advantage plans usually have lower premiums and deductibles than Medigap. The trade-off is that you must use doctors and hospitals in the plan's network, and you may need prior approval from the plan before certain services. Out-of-pocket costs vary widely by plan.

Choosing between Original Medicare with Medigap and Medicare Advantage depends on your health needs, which doctors you want to see, and how much you want to spend. There is no single right answer—it depends on your situation.

How Deductibles and Out-of-Pocket Maximums Work

A deductible is the amount you must pay out of your own pocket before Medicare starts paying. Part A has a deductible of $1,600 per benefit period (a benefit period starts when you are admitted to the hospital and ends 60 days after you leave). Part B has an annual deductible of $240 per year. Part D deductibles vary by plan but can be up to $545. These deductibles reset each year (or each benefit period for Part A).

Original Medicare does not have an out-of-pocket maximum—meaning there is no limit to how much you could pay in coinsurance if you have a serious illness or injury. This is one reason many people buy Medigap or choose Medicare Advantage. Medicare Advantage plans do have out-of-pocket maximums, which means once you reach that limit, the plan pays 100 percent of covered services for the rest of the year.

Frequently Asked Questions

Does Medicare cover my doctor's visit if I have not met my deductible yet?

Medicare Part B will not pay anything until you meet your annual deductible ($240 in 2024). Once you meet it, Medicare pays 80 percent of the approved amount and you pay 20 percent. Some preventive services, like annual wellness visits, are covered at no cost even before you meet your deductible.

What happens if my doctor charges more than Medicare allows?

If your doctor is a "participating provider," they have agreed to accept Medicare's approved amount as full payment. You pay only your share of that approved amount. If your doctor is not a participating provider, they can charge up to 15 percent more than Medicare's approved amount, and you are responsible for that extra charge. Ask your doctor's office whether they participate in Medicare before your visit.

Does Medicare cover prescription drugs while I am in the hospital?

Yes. Part A covers drugs you receive while you are an inpatient in a hospital or skilled nursing facility. Part D covers drugs you take at home. If you are discharged from the hospital with a new prescription, Part D covers it once you fill it at a pharmacy.

Can I change my Medicare coverage if I realize I chose the wrong plan?

You have a limited window to change plans. If you are new to Medicare, you have seven months to make changes during your Initial Enrollment Period. After that, you can change plans during the Annual Enrollment Period (October 15 to December 7 each year). Some life events, like moving or losing other insurance, may open a Special Enrollment Period outside these windows.

What should I do if I receive a bill I think Medicare should have paid?

Contact Medicare at 1-800-MEDICARE to ask about the bill. You can also request an explanation of benefits (EOB) from Medicare to see what it paid and why. If you believe Medicare made an error, you have the right to appeal the decision. Your doctor's office can also help you understand the bill and contact Medicare on your behalf.