What Medicare actually pays for

Medicare covers hospital stays, doctor visits, lab tests, imaging (X-rays and CT scans), surgery, and most prescription drugs once you reach the coverage gap. It pays for preventive care with no copay — annual wellness visits, cancer screenings, vaccines. It covers mental health treatment, dialysis, and transplants. It pays for skilled nursing care in a facility after a hospital stay, but only for the first 100 days and only if you were hospitalized first.

The catch is that Medicare does not cover the full cost of any of these things. You pay a deductible before Medicare pays anything. You pay a copay or coinsurance for each service. Original Medicare (Parts A and B) has no annual cap on what you pay out of pocket — you could spend thousands in a single year. Medicare Advantage plans (Part C) do have annual caps, usually between $6,700 and $7,550, but they restrict which doctors you can see.

Key Takeaways

  • Medicare covers hospital care, doctor visits, preventive screenings, and most prescription drugs, but you pay a deductible and copay for each service.
  • Original Medicare has no limit on how much you pay out of pocket in a year, while Medicare Advantage plans cap your costs but limit your choice of doctors.
  • Dental, vision, hearing aids, and long-term care are not covered by any Medicare plan and require separate insurance or out-of-pocket payment.
  • Skilled nursing care is covered only for the first 100 days after a hospital stay, and only if the stay was at least three days long.
  • Prescription drug coverage (Part D) has a coverage gap where you pay the full price of drugs between $5,030 and $10,635 in annual costs.

The major gaps: what Medicare will not pay for

Medicare does not cover dental work, including cleanings, fillings, root canals, or dentures. It does not cover vision care — eye exams, glasses, or contact lenses — except for one eye exam every two years if you have diabetes. It does not cover hearing aids or the exam to fit them, though it covers the exam itself if ordered by a doctor for another reason.

Long-term care — nursing home care, assisted living, or in-home care — is not covered by Medicare. This is the single largest gap for people over 65. Medicare covers skilled nursing only, and only temporarily. If you need help with daily activities for months or years, you pay out of pocket until your money runs out, then Medicaid may cover it. Many people buy long-term care insurance or set aside savings for this reason.

Medicare also does not cover routine foot care (unless you have diabetes), acupuncture (with rare exceptions), or most cosmetic procedures. It does not cover travel outside the United States, except in limited cases in Canada and Mexico. It does not cover experimental treatments unless you are in a clinical trial that Medicare has approved.

How the prescription drug coverage gap works

If you have Part D (prescription drug coverage), you pay a monthly premium and a deductible. Once you reach the deductible, Medicare and your insurance split the cost of drugs — you pay a copay, they pay the rest. This continues until your total drug costs (what you paid plus what the plan paid) reach $5,030 in a year. At that point, you enter the "coverage gap" and pay the full price of drugs yourself.

This gap continues until your out-of-pocket costs reach $10,635. Once you cross that threshold, catastrophic coverage kicks in and you pay only a small copay for the rest of the year. The dollar amounts change each year. Many people with low incomes can get help paying for drugs during the gap through the Extra Help program, which is run by Social Security.

What you pay: deductibles, copays, and coinsurance

Original Medicare Part A (hospital insurance) has a deductible of $1,676 per benefit period in 2024. A benefit period starts when you enter the hospital and ends 60 days after you leave. If you are hospitalized twice in the same year, you pay the deductible twice. After you meet the deductible, Medicare pays all hospital costs for days 1 through 60. Days 61 through 90 cost you $419 per day. Days 91 and beyond cost you $838 per day, up to a lifetime limit of 60 extra days.

Part B (doctor and outpatient care) has a deductible of $240 per year. After you meet it, you pay 20 percent of the cost of most services. Your doctor's office bills Medicare first, Medicare pays 80 percent, and you pay 20 percent. There is no annual cap on Part B costs in Original Medicare.

Medicare Advantage plans vary widely. Some have zero deductible. Some have copays as low as $10 per doctor visit. But they all have an annual out-of-pocket maximum — once you reach it, the plan pays 100 percent of covered services for the rest of the year. This maximum is capped by federal law, but the exact amount depends on your plan.

Preventive care with no cost to you

Medicare covers certain preventive services with no deductible, copay, or coinsurance. These include an annual wellness visit with your doctor, colorectal cancer screening (colonoscopy or other methods), mammography for breast cancer, prostate cancer screening, cardiovascular disease screening, diabetes screening, bone density testing, and vaccines for flu, pneumonia, shingles, and COVID-19.

The catch is that these services must be ordered by a doctor and performed by an in-network provider. If your doctor orders additional tests during a preventive visit — say, blood work beyond what the screening includes — you may be charged for those extras. Ask your doctor in advance which tests are included in your preventive visit and which might cost you money.

Rehabilitation and therapy coverage

Medicare covers physical therapy, occupational therapy, and speech therapy, but only if a doctor orders them and only if they are medically necessary. You must be either an inpatient in a hospital or skilled nursing facility, or receiving outpatient services at a hospital or approved clinic. You cannot straightforward go to a therapy clinic on your own and have Medicare pay.

Outpatient therapy has a financial limit. In 2024, Medicare covers up to $2,430 in physical therapy and speech therapy combined, and up to $2,430 in occupational therapy. Once you reach these caps, you pay the full cost unless your doctor documents that continued therapy is medically necessary, in which case Medicare may cover more. These limits reset each year.

Mental health and substance use treatment

Medicare covers mental health treatment — therapy, counseling, and psychiatric care — at the same rate as physical health care. You pay your deductible and coinsurance just as you would for a doctor visit. Medicare also covers treatment for substance use disorders, including inpatient rehabilitation, outpatient programs, and medication-assisted treatment like methadone or buprenorphine.

The limitation is access. Many therapists and psychiatrists do not accept Medicare, or they accept it but have long waiting lists. You may have to travel farther or wait longer to find a provider. If you are in a Medicare Advantage plan, your options are limited to in-network providers, which may be fewer than in Original Medicare.

Frequently Asked Questions

Does Medicare cover my blood pressure medication?

Yes, if you have Part D (prescription drug coverage). You pay a copay based on which tier the drug is on — typically $5 to $15 for generic drugs, more for brand-name drugs. If you do not have Part D and did not sign up during your initial enrollment period, you pay the full price and may face a penalty when you do sign up later.

Will Medicare pay for my wife to stay in a nursing home?

Only if she was hospitalized for at least three days first, and only for up to 100 days. After that, you pay out of pocket. If she needs long-term care without a hospital stay first, Medicare does not cover it at all. Medicaid may cover it once her savings are depleted, depending on your state.

What happens if I need care outside the United States?

Original Medicare does not cover care in other countries. Medicare Advantage plans sometimes cover emergency care in Canada and Mexico if you are traveling. If you plan to spend time abroad, you may need to buy supplemental travel insurance or arrange care through a private provider.

Does Medicare cover home health care?

Yes, but only skilled care — nursing, physical therapy, or speech therapy ordered by a doctor. You must be homebound or have difficulty leaving home. Medicare does not cover custodial care, which is help with bathing, dressing, or meals. If you need only custodial care, you pay out of pocket or through Medicaid if you may have access to.

Can I use my Medicare to see any doctor I want?

With Original Medicare, yes — any doctor who accepts Medicare. With Medicare Advantage, no — you must use in-network doctors except in emergencies. Some Advantage plans require you to choose a primary care doctor and get referrals to see specialists. Check your plan's provider network before you sign up.