The Four Parts of Medicare and What Each One Pays For

Medicare has four separate parts, and each one 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 like wheelchairs or oxygen. Part D covers prescription drugs. Part C, also called Medicare Advantage, is a private insurance alternative that bundles Parts A, B, and usually D into one plan, but with its own rules about which doctors and hospitals you can use.

Most people think of Medicare as one program, but it works more like a toolkit where you pick which pieces you need. Part A and Part B are the foundation — Part A is automatic when you turn 65, and Part B is optional but recommended. Part D is separate and you add it on. Part C replaces Parts A and B entirely if you choose it, so you cannot have both.

The coverage gaps between these parts matter because they are where your costs go up. Medicare does not cover everything, and understanding what falls into those gaps helps you plan for out-of-pocket expenses or supplemental insurance.

Key Takeaways

  • Part A covers hospital stays and skilled nursing facilities after hospitalization, but only for a limited number of days and with increasing out-of-pocket costs the longer you stay.
  • Part B covers doctor visits and outpatient services, but you pay a monthly premium and a percentage of costs after you meet your deductible.
  • Part D covers prescription drugs through a separate plan you choose, and costs vary widely depending on which drugs you take and which plan you pick.
  • Medicare does not cover dental, vision, hearing aids, long-term care, or most preventive care like annual physicals — you either pay out of pocket or buy supplemental coverage.
  • Part C (Medicare Advantage) bundles coverage but restricts your choice of doctors and hospitals, and often has lower premiums but higher out-of-pocket costs when you use care.

What Part A Covers: Hospital and Facility Care

Part A pays for inpatient hospital stays, but the amount you pay out of pocket depends on how long you stay. For 2024, you pay a deductible of $1,676 for the first 60 days of a hospital stay in a benefit period. Days 61 through 90 cost you $419 per day. After 90 days, you enter "lifetime reserve days" — 60 additional days you can use over your entire lifetime — and those cost $838 per day. Once you run out of reserve days, you pay the full hospital bill yourself.

Part A also covers skilled nursing facility (SNF) care, but only if you were hospitalized for at least three days first and are admitted within 30 days of leaving the hospital. The facility must be Medicare-certified. You pay nothing for days 1 through 20, then $209.50 per day for days 21 through 100 (as of 2024). After 100 days in a benefit period, you pay all costs.

Home health services are covered if a doctor orders them, you are homebound, and the care is skilled (like nursing or physical therapy, not just help with daily tasks). Hospice care is covered for people with a terminal diagnosis, and it covers pain management, symptom relief, and comfort care rather than curative treatment.

What Part B Covers: Doctor Visits and Outpatient Care

Part B covers visits to doctors, specialists, and other providers like physical therapists and psychologists. It also covers outpatient hospital services, diagnostic tests, imaging, lab work, and durable medical equipment (wheelchairs, walkers, oxygen, CPAP machines). You pay a monthly premium — $164.90 for most people in 2024, though higher earners pay more — plus a $240 annual deductible, then 20 percent of the cost of most services after that.

Part B also covers some preventive services at no cost to you after you meet your deductible, including annual wellness visits, certain cancer screenings, cardiovascular screenings, and diabetes screenings. However, it does not cover routine dental cleanings, eye exams for glasses or contacts, or hearing tests. Those are out of pocket unless you have supplemental coverage.

One important limit: Part B covers mental health services, but only if provided by a Medicare-enrolled provider. If you see a therapist or psychiatrist who does not accept Medicare, you pay the full bill yourself. Always confirm a provider accepts Medicare before your first visit.

What Part D Covers: Prescription Drugs

Part D is prescription drug coverage you choose separately from Part A and B. You pick a plan from private insurers, and each plan has its own list of covered drugs, called a formulary. The same drug may be covered under one plan but not another, or covered at different costs. This is why comparing plans matters — the cheapest premium is not always the cheapest plan overall if your drugs are expensive under that plan.

Part D plans have a deductible (usually $100 to $500), then you pay a percentage of drug costs until you reach an out-of-pocket spending limit. Once you hit that limit, you enter "catastrophic coverage" and pay a small copay for the rest of the year. The exact costs depend on the plan and the drug.

You must enroll in Part D when you first become may be able to access for Medicare, or pay a penalty if you join later. The penalty is 1 percent of the national average premium for each month you were not enrolled, added to your premium permanently. If you have drug coverage through an employer or union, you may be able to delay Part D without penalty — ask your benefits administrator.

What Medicare Does Not Cover

Medicare does not cover dental care, including cleanings, fillings, extractions, or dentures. It does not cover routine eye exams, glasses, or contact lenses. Hearing aids and hearing tests are not covered. Long-term care — whether in a nursing home, assisted living facility, or at home — is not covered by Medicare, though Medicaid may cover it if you meet income and asset limits.

Routine physical exams are not covered, though the annual wellness visit is. Most cosmetic procedures are not covered. Acupuncture is covered only for chronic lower back pain under specific conditions. Massage therapy is not covered. Travel outside the United States is not covered — Medicare only pays for care in the U.S., Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.

Many people buy Medigap (supplemental insurance) to cover these gaps and reduce out-of-pocket costs. Medigap plans are sold by private insurers and standardized by the federal government, so Plan G from one company covers the same things as Plan G from another. However, Medigap is separate from Medicare and costs extra.

Part C (Medicare Advantage) and How Its Coverage Differs

Medicare Advantage plans are an alternative to Original Medicare (Parts A and B). They bundle hospital, doctor, and usually drug coverage into one plan run by a private insurance company. The monthly premium is often lower than Part B alone, and some plans have zero premium. However, you trade flexibility for cost.

Most Medicare Advantage plans use a network — you must see doctors and use hospitals in that network, or pay more or nothing at all if you go out of network. Some plans require referrals to see specialists. Many have copays for each doctor visit or service, rather than the 20 percent coinsurance of Original Medicare. Out-of-pocket maximums are capped by federal law, but you can still spend thousands per year.

Medicare Advantage plans must cover everything Original Medicare covers, but they can add extra benefits like dental, vision, or fitness programs. However, these extras vary by plan and by region. If you travel frequently or move, check whether your plan works in the places you go — many plans are regional and do not cover care outside their service area.

Costs You Pay: Premiums, Deductibles, and Coinsurance

Your total Medicare costs include premiums (monthly payments), deductibles (amounts you pay before coverage starts), and coinsurance or copays (your share of each service). Part A has no monthly premium if you or your spouse paid Medicare taxes for at least 10 years. Part B has a monthly premium that increases if your income is above certain thresholds. Part D premiums vary by plan.

If your income is above $97,000 (single) or $194,000 (married) in 2024, you pay an additional amount called Income-Related Monthly Adjustment Amount (IRMAA) on top of your Part B and Part D premiums. This amount increases as your income rises. Your income is measured using your tax return from two years prior, so changes in income take time to affect your premiums.

Costs also depend on whether you have Original Medicare or Medicare Advantage, and whether you buy supplemental coverage. A person on Original Medicare with Medigap and Part D may have predictable costs but higher premiums. A person on Medicare Advantage may have lower premiums but higher costs when they use care. There is no single cheapest option — it depends on how much care you use and which doctors you see.

Frequently Asked Questions

Does Medicare cover annual physical exams?

Medicare Part B covers one "Welcome to Medicare" preventive visit in your first year on Medicare, and an annual wellness visit after that. These are free after you meet your deductible. However, a full physical exam with a doctor of your choice may not be covered the same way — ask your doctor whether the visit qualifies as a wellness visit before you go.

What happens if I need care while traveling outside the United States?

Original Medicare does not cover care outside the U.S. except in limited cases (Canada and Mexico for emergencies, and a few U.S. territories). Medicare Advantage plans also do not cover out-of-country care. If you travel internationally, you need travel health insurance or must pay out of pocket. Plan ahead if you travel frequently.

Can I use any doctor with Medicare?

With Original Medicare (Parts A and B), you can see any doctor who accepts Medicare — there is no network. With Medicare Advantage, you must use doctors and hospitals in your plan's network, or pay more. Always call ahead to confirm a doctor accepts Medicare or your specific plan before scheduling.

Do I have to take Part B when I turn 65?

Part B is optional, but if you delay enrolling and do not have other may have access to coverage, you pay a permanent penalty. If you are still working and covered by your employer's health plan, you may be able to delay Part B without penalty — ask your employer's benefits office about creditable coverage.

What is the difference between Medicare and Medicaid?

Medicare is federal health insurance for people 65 and older, regardless of income. Medicaid is a joint federal-state program for people with low income and assets. Some people may have access to for both (called "dual may be able to access"). They are separate programs with different rules, coverage, and costs.