Medicare is federal health insurance for people 65 and older, some younger people with disabilities, and people with end-stage renal disease

Medicare pays for hospital stays, doctor visits, prescription drugs, and preventive care like screenings and vaccines. It does not cover everything — you will have costs like deductibles, copays, and coinsurance. Understanding what Medicare covers helps you plan for out-of-pocket expenses and decide whether you need additional insurance.

Medicare has four parts, each covering different services. Most people get Part A (hospital insurance) and Part B (medical insurance) automatically when they turn 65. Part D (prescription drug coverage) and Part C (Medicare Advantage) are optional but recommended if you take medications or want an alternative to Original Medicare.

Key Takeaways

  • Part A covers hospital stays, skilled nursing care, hospice, and some home health services after a hospital stay.
  • Part B covers doctor visits, outpatient care, lab tests, imaging, and preventive services like annual wellness visits and cancer screenings.
  • Part D covers prescription medications and is separate from Parts A and B; you choose a plan during enrollment periods.
  • Original Medicare (Parts A and B) has deductibles and coinsurance; you pay a percentage of costs after meeting your deductible.
  • Medicare Advantage (Part C) is an alternative to Original Medicare offered by private insurers and often includes prescription drug coverage.

What Part A covers: Hospital and facility care

Part A pays for inpatient hospital stays, including room, meals, and standard nursing care. It covers up to 60 days in a hospital benefit period, though you pay a deductible for each stay. After 60 days, you pay coinsurance (a daily amount) for days 61 through 90, and higher coinsurance for any days beyond 90.

Part A also covers skilled nursing facility care — not regular nursing home care, but short-term care after a hospital stay of at least three days. You must be admitted to the facility within 30 days of leaving the hospital. Medicare covers the first 20 days fully, then you pay coinsurance for days 21 through 100.

Hospice care for people with terminal illness is covered under Part A, as is some home health care when ordered by a doctor and provided by a Medicare-approved agency. Home health visits are free if you meet the requirements, but equipment and supplies may have copays.

What Part B covers: Doctor visits and outpatient services

Part B covers visits to doctors, specialists, and other healthcare providers. It pays for office visits, emergency room care, outpatient surgery, and diagnostic tests like blood work and X-rays. You pay a monthly premium for Part B, a yearly deductible, and then 20 percent coinsurance for most services after you meet the deductible.

Preventive services are covered at no cost under Part B — this includes your annual wellness visit, cancer screenings (mammograms, colonoscopies, Pap tests), cardiovascular screenings, bone density tests, and vaccinations like flu and pneumonia shots. These services do not count toward your deductible.

Part B also covers mental health services, including therapy and psychiatric visits, at the same 20 percent coinsurance rate as other doctor visits. Physical therapy, occupational therapy, and speech-language pathology are covered when medically necessary and ordered by a doctor.

What Part D covers: Prescription medications

Part D is prescription drug coverage run by private insurance companies approved by Medicare. You choose a Part D plan during your initial enrollment period or during the annual open enrollment period in October and November. Plans vary in which drugs they cover and what you pay, so comparing plans matters if your medications change year to year.

Part D plans have a deductible (usually $100 to $500, depending on the plan), then you pay copays 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 stage where you pay more out of pocket. After you spend enough in the gap, catastrophic coverage kicks in and your costs drop again.

If you do not sign up for Part D when you first become may be able to access and you go without coverage, you may pay a penalty when you do enroll. The penalty is a percentage of the national average Part D premium and is added to your monthly premium permanently.

What Medicare does not cover

Medicare does not pay for routine dental care, dentures, dental implants, or tooth cleaning. Vision care like eye exams for glasses or contact lenses is not covered, though some preventive eye exams for glaucoma are. Hearing aids and hearing exams are not covered, though some Medicare Advantage plans may offer limited hearing benefits.

Long-term care in a nursing home — care that is not skilled nursing but custodial or personal care — is not covered by Medicare. This is a major gap for many people; Medicaid may cover it if you meet income and asset limits, but Medicare does not. Cosmetic surgery, weight loss surgery (unless medically necessary), and most alternative therapies are not covered.

Routine foot care, including nail trimming, is not covered unless you have a medical condition like diabetes that makes foot care medically necessary. Routine physical exams for work or sports are not covered. Travel outside the United States is not covered under Original Medicare, though some Medicare Advantage plans offer limited international coverage.

How costs work: Deductibles, copays, and coinsurance

Original Medicare (Parts A and B) uses deductibles and coinsurance rather than copays. A deductible is the amount you pay out of pocket before Medicare starts paying. For Part A, there is a deductible per hospital stay. For Part B, there is a yearly deductible, and then Medicare pays 80 percent of approved charges while you pay 20 percent coinsurance.

Copays are fixed dollar amounts you pay per visit or service. Part D plans use copays for prescriptions — you might pay $5 for a generic drug, $15 for a preferred brand-name drug, and $40 for a non-preferred drug, depending on your plan. Medicare Advantage plans often use copays instead of coinsurance and may have lower out-of-pocket costs than Original Medicare.

Your out-of-pocket costs can add up quickly if you have a hospital stay or need ongoing treatment. Original Medicare has no yearly limit on what you pay, which is why many people buy supplemental insurance (Medigap) to cover the gaps. Medicare Advantage plans have a yearly out-of-pocket maximum — once you reach it, the plan pays 100 percent of covered services for the rest of the year.

Medicare Advantage versus Original Medicare

Medicare Advantage (Part C) is an alternative to Original Medicare offered by private insurance companies. Instead of going to any doctor who accepts Medicare, you choose a plan and usually use doctors and hospitals in that plan's network. Most Medicare Advantage plans include Part D prescription drug coverage, and many include dental, vision, or hearing benefits that Original Medicare does not.

The trade-off is that Medicare Advantage plans often have lower monthly premiums and out-of-pocket costs than Original Medicare plus Medigap, but you have less flexibility in choosing providers. If you travel or move, you may need to switch plans. Some plans require prior authorization before certain services, meaning your doctor must get approval from the plan before you can have a procedure.

Original Medicare lets you see any doctor or hospital that accepts Medicare without needing permission first. You have more freedom but higher out-of-pocket costs unless you buy Medigap supplemental insurance. The choice between Original Medicare and Medicare Advantage depends on your health, your doctors, and whether you prefer lower premiums or more provider choice.

Frequently Asked Questions

Does Medicare cover physical therapy?

Yes, physical therapy is covered under Part B when ordered by a doctor for a medical condition. You pay 20 percent coinsurance after meeting your yearly deductible. Medicare limits the number of visits per year for certain conditions, so your doctor will need to document medical necessity.

What happens if I do not sign up for Medicare at 65?

If you delay Part B enrollment and do not have other may have access to coverage, you will pay a penalty — a percentage of the national average Part B premium added to your monthly premium for life. The penalty increases the longer you wait. Part A has no penalty if you have worked long enough to may have access to.

Does Medicare pay for glasses or hearing aids?

Original Medicare does not cover routine eye exams, glasses, contacts, or hearing aids. Some Medicare Advantage plans include limited vision or hearing benefits, so check your plan. Medicaid may cover these services in some states if you may have access to by income.

Can I use Medicare outside the United States?

Original Medicare does not cover care outside the U.S. except in limited situations like emergency care in Canada or Mexico near the border. Medicare Advantage plans vary; some offer limited international coverage. If you travel abroad regularly, ask your plan what is covered.

What is the difference between Medicare and Medicaid?

Medicare is federal health insurance based on age or disability, regardless of income. Medicaid is a joint federal and state program for people with low income. You can have both — this is called "dual may be able to access." They cover different services and have different rules.