The Four Parts of Medicare Coverage

Medicare is divided into four parts, and each covers different things. Part A covers hospital stays, skilled nursing care after a hospital stay, hospice, and some home health services. Part B covers doctor visits, outpatient care, lab tests, imaging, and medical equipment. Part D covers prescription drugs. Part C, also called Medicare Advantage, is an alternative to Parts A and B offered by private insurers — it covers everything Parts A and B cover, but often with different costs and networks.

Most people turn 65 and get Part A and Part B automatically. Part D is separate and you choose a plan. Part C is optional and replaces Part A and B if you pick it. Understanding what each part covers helps you know what costs you'll face and what you still need to pay for.

Key Takeaways

  • Part A covers hospital stays and skilled nursing facilities; Part B covers doctor visits and outpatient services; Part D covers prescription drugs.
  • Medicare does not cover dental, vision, hearing aids, or long-term custodial care in nursing homes.
  • You pay a deductible before coverage starts, and you pay coinsurance or copays for most services even after the deductible is met.
  • Original Medicare (Parts A and B) has no network restrictions, but you pay 20 percent coinsurance for most Part B services after the deductible.
  • Medigap and Medicare Advantage are two different ways to reduce your out-of-pocket costs, and you must choose one or the other, not both.

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 admitted. It also covers blood transfusions and medications given in the hospital.

Part A also covers skilled nursing facility care after a hospital stay. You must have been in the hospital for at least three days, and you must move to the nursing facility within 30 days of leaving the hospital. Part A covers up to 100 days per benefit period, but you pay coinsurance starting on day 21. After day 100, you pay the full cost.

Part A covers home health services — nursing visits, physical therapy, and occupational therapy at home — but only if a doctor orders them and you are homebound. It does not cover help with bathing, dressing, or meals unless those services are part of a skilled nursing visit. Part A also covers hospice care for people with a terminal illness.

What Part B Covers

Part B covers doctor visits, whether in an office, urgent care, or the emergency room. It covers preventive care visits and screenings at no cost to you — things like annual wellness visits, cancer screenings, and vaccines. It covers lab tests, X-rays, and imaging ordered by a doctor.

Part B covers outpatient surgery and procedures, mental health services, and physical or occupational therapy. It covers durable medical equipment like wheelchairs, walkers, oxygen equipment, and diabetic supplies. It covers ambulance transport if medically necessary.

For most Part B services, you pay a yearly deductible (the amount varies by year), and then you pay 20 percent of the cost as coinsurance. For some services like office visits, you may pay a fixed copay instead. Part B does not cover routine dental care, vision exams, eyeglasses, or hearing aids.

What Part D Covers

Part D is prescription drug coverage. You choose a Part D plan from a private insurer, and the plan covers medications on its formulary — the list of drugs the plan will pay for. Different plans cover different drugs, so you need to check whether your medications are on the plan's list before you sign up.

You pay a monthly premium for Part D, and then you pay a deductible before the plan starts paying. Once you hit the deductible, you pay a copay or coinsurance for each prescription. The amount you pay changes depending on the drug's tier — generic drugs cost less than brand-name drugs.

There is a coverage gap called the "donut hole." Once you and your plan have spent a certain amount on drugs in a year, you enter the gap and pay more out of pocket until you reach catastrophic coverage. The amounts change each year. After you reach catastrophic coverage, you pay a small copay and the plan pays the rest.

What Medicare Does Not Cover

Medicare does not cover dental care — not cleanings, fillings, extractions, or dentures. It does not cover vision care — not eye exams, eyeglasses, or contact lenses. It does not cover hearing aids or hearing exams for the purpose of fitting hearing aids, though it does cover the exam if it is part of a medical workup for another condition.

Medicare does not cover long-term custodial care in a nursing home — that is, care that is mainly help with daily living rather than skilled nursing. If you need a nursing home for more than 100 days, or if you do not may have access to for Part A coverage, you pay out of pocket or through Medicaid if you meet income and asset limits.

Medicare does not cover routine foot care, cosmetic surgery, weight loss surgery (unless medically necessary for another condition), or most acupuncture. It does not cover most over-the-counter medications. It does not cover travel outside the United States, except in limited cases in Canada and Mexico.

How Much You Pay Out of Pocket

Your costs depend on which parts of Medicare you use and what services you receive. For Part A, you pay a deductible per hospital stay (the amount changes yearly), and then the hospital stay is covered for days 1 through 60. Days 61 through 90 require coinsurance. Days 91 and beyond are covered only if you use lifetime reserve days, which are limited.

For Part B, you pay a yearly deductible and then 20 percent coinsurance for most services. Some preventive services have no cost. For Part D, you pay a monthly premium, a yearly deductible, and then copays or coinsurance based on the drug's tier and your plan.

Your total out-of-pocket costs can add up, especially if you have a serious illness or need ongoing care. Many people buy Medigap (supplemental insurance) to cover some of the costs Medicare does not pay. Others choose Medicare Advantage instead of Original Medicare; Advantage plans often have lower out-of-pocket maximums but restrict you to a network of doctors.

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, which is most providers. You pay a deductible and coinsurance, and your costs are not capped — you could pay more if you have a serious illness.

Medicare Advantage is Part C, offered by private insurers. It covers everything Original Medicare covers, but it may have lower premiums and out-of-pocket maximums. The trade-off is that you must use doctors and hospitals in the plan's network, except in emergencies. Some Advantage plans include dental, vision, or hearing coverage that Original Medicare does not.

You cannot have both Original Medicare and Medicare Advantage at the same time. If you have Original Medicare and want to add drug coverage, you buy Part D separately. If you have Medicare Advantage, drug coverage is usually included in the plan.

Frequently Asked Questions

Does Medicare cover preventive care?

Yes. Part B covers preventive services like annual wellness visits, cancer screenings, vaccines, and blood pressure checks at no cost to you. You do not pay a copay or coinsurance for these services. However, if the visit leads to a problem that needs treatment, you may pay for the treatment itself.

What happens if I need care outside the United States?

Original Medicare does not cover care outside the U.S., except in limited cases in Canada and Mexico. If you travel internationally, you may want to buy travel insurance. Some Medicare Advantage plans offer limited coverage abroad, so check your plan's rules before you travel.

Does Medicare cover mental health services?

Yes. Part B covers outpatient mental health visits with a psychiatrist, psychologist, or licensed counselor. You pay the same deductible and coinsurance as for other Part B services. Inpatient psychiatric hospital care is covered under Part A, though there are limits on the number of days covered per lifetime.

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

Yes, but only during certain times. You can change during the Annual Enrollment Period (October 15 to December 7 each year), and changes take effect January 1. If you have a may have access to life event like moving, losing other insurance, or getting married, you may be able to change outside the enrollment period.

What is the difference between a copay and coinsurance?

A copay is a fixed amount you pay for a service — for example, $25 for a doctor visit. Coinsurance is a percentage of the cost — for example, 20 percent of the bill. Medicare Part B typically uses coinsurance; some Part B services and most Medicare Advantage plans use copays.