Medicare pays for hospital stays, doctor visits, and prescription drugs when you turn 65 or become disabled

Medicare is a federal health insurance program run by the Centers for Medicare & Medicaid Services (CMS). It covers inpatient hospital care, outpatient doctor visits, preventive screenings, and prescription medications. The program exists because most people over 65 have higher medical costs and face difficulty getting affordable coverage on the private market. Medicare also covers some younger people with disabilities and people with end-stage renal disease.

The program is divided into four parts, each covering different services. Understanding what each part does helps you know what costs Medicare will handle and what you may need to pay yourself or cover through other insurance.

Key Takeaways

  • Medicare Part A covers hospital stays, skilled nursing care, hospice, and some home health services.
  • Medicare Part B covers doctor visits, outpatient care, lab tests, imaging, and medical equipment like wheelchairs and oxygen.
  • Medicare Part D covers prescription drugs and is offered by private insurance companies approved by Medicare.
  • Medicare Part C (Advantage Plans) is an alternative way to receive Parts A and B coverage through a private insurer, often including Part D.
  • You pay premiums, deductibles, and copayments depending on which parts you choose and how much care you use.

Part A: Hospital and Skilled Nursing Care

Medicare Part A covers inpatient hospital stays, meaning you stay overnight in a hospital bed. It pays for your room, meals, nursing care, medications given in the hospital, and medical equipment used during your stay. Part A also covers skilled nursing facility care — a facility that provides medical care beyond what a regular nursing home offers — for up to 100 days per benefit period if you need it after a hospital stay.

Part A also covers hospice care if you have a terminal illness, and some home health services when you are homebound and need skilled nursing or therapy. Most people do not pay a monthly premium for Part A because they or their spouse paid Medicare taxes while working. However, you do pay a deductible for each hospital stay, and the amount changes each year.

Part B: Doctor Visits and Outpatient Services

Medicare Part B covers doctor office visits, whether you see your primary care doctor or a specialist. It pays for lab tests, X-rays, CT scans, ultrasounds, and other diagnostic imaging. Part B also covers preventive services like annual wellness visits, cancer screenings, and vaccinations at no cost to you beyond your premium.

Part B covers medical equipment and supplies — wheelchairs, walkers, oxygen tanks, diabetic testing supplies, and similar items — when your doctor orders them. It also covers outpatient surgery, emergency room visits, and urgent care. You pay a monthly premium for Part B, and you also pay a yearly deductible. After you meet the deductible, you typically pay 20 percent of the cost for most services, and Medicare pays 80 percent.

Part D: Prescription Drug Coverage

Medicare Part D is prescription drug coverage offered by private insurance companies that have contracts with Medicare. It covers brand-name and generic medications, and the specific drugs covered depend on which plan you choose. Each plan has a formulary — a list of covered medications — and you can compare formularies on Medicare.gov to find a plan that covers the drugs you take.

Part D coverage has stages: you pay a copayment or coinsurance for each prescription until you reach your plan's deductible. After that, you pay a set amount per prescription until your out-of-pocket costs hit a certain level. Once you reach that level, you enter the "donut hole," where you pay a higher share of drug costs. After your total spending reaches a yearly maximum, Medicare pays most of the cost for the rest of the year. You must sign up for Part D when you first become may be able to access, or you may pay a penalty if you join later.

Part C: Medicare Advantage Plans as an Alternative

Medicare Advantage (Part C) is an alternative way to get your Medicare coverage. Instead of using Original Medicare (Parts A and B), you join a private insurance plan approved by Medicare. The plan must cover everything Part A and Part B cover, but it may do so with different doctors, hospitals, and costs. Many Advantage plans also include Part D prescription drug coverage.

Advantage plans often have lower monthly premiums than Original Medicare combined with a separate Part D plan, but they typically have higher copayments and may require you to use doctors and hospitals within their network. Some plans include dental, vision, or hearing coverage that Original Medicare does not offer. You can switch to a different Advantage plan or back to Original Medicare during the annual enrollment period, which runs from October 15 to December 7 each year.

What Medicare Does Not Cover

Medicare does not pay for routine dental care, eyeglasses, hearing aids, or routine eye exams. It does not cover long-term custodial care in a nursing home — only skilled nursing care for a limited time after a hospital stay. Routine foot care, cosmetic surgery, and most weight-loss treatments are not covered.

Medicare also does not cover care you receive outside the United States, except in limited situations near the border. If you travel abroad, you may want supplemental coverage. Many people buy a Medigap policy (also called a supplement) to cover costs that Original Medicare leaves unpaid, such as deductibles and coinsurance.

How Much You Pay: Premiums, Deductibles, and Copayments

Your costs depend on which parts of Medicare you use and which plan you choose. Part A has no monthly premium for most people, but you pay a deductible for each hospital stay. Part B has a monthly premium that increases if your income is higher. Part D premiums vary by plan and change each year.

After you meet your deductible, you typically pay a percentage of the cost (coinsurance) or a fixed amount per visit (copayment). The exact amounts change each year. You can find current premiums, deductibles, and copayment amounts on Medicare.gov, or call 1-800-MEDICARE to speak with someone who can explain your specific costs based on the plan you choose.

Frequently Asked Questions

Does Medicare cover everything once I turn 65?

No. Medicare covers hospital care, doctor visits, and prescription drugs, but it does not cover dental, vision, hearing aids, or long-term nursing home care. You may want to buy a Medigap supplement or choose a Medicare Advantage plan that includes extra benefits.

Can I use any doctor with Medicare?

With Original Medicare (Parts A and B), most doctors accept Medicare, but you should check before your visit. With a Medicare Advantage plan, you must use doctors and hospitals in the plan's network, with few exceptions. Ask your doctor's office whether they accept your specific Medicare plan.

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

If you delay signing up without a valid reason, you may pay a permanent penalty on your premiums. The penalty is 10 percent per year for Part B and varies for Part D. You can sign up during the general enrollment period (January 1 to March 31), but the penalty applies unless you have a may have access to life event.

Is there a difference between Medicare and Medicaid?

Yes. Medicare is a federal program for people 65 and older and some younger people with disabilities. Medicaid is a joint federal and state program for people with low income. Some people may have access to for both programs, sometimes called "dual may be able to access."

Can I change my Medicare plan after I sign up?

You can change plans during the annual enrollment period (October 15 to December 7). If you have a may have access to life event — such as moving, losing other coverage, or a major change in income — you may be able to change plans outside the enrollment period.