Medicare covers hospital and doctor visits, but not everything — and the gaps matter

The most accurate statement about Medicare is that it is a federal health insurance program for people 65 and older, some younger people with disabilities, and people with end-stage renal disease — but it does not cover all medical costs. Medicare has four separate parts, each covering different services, and you pay out-of-pocket for anything outside those parts. The program pays a percentage of approved costs, not the full amount, and you are responsible for deductibles, copayments, and coinsurance. Understanding what Medicare actually covers and what it does not is the first step to planning for the costs it will not pay.

Many people assume Medicare works like the health insurance they had while working, but it does not. It is designed to cover major medical events — hospital stays, doctor visits, prescription drugs — but leaves significant gaps. Those gaps are where your actual out-of-pocket costs come from, and they are why most people on Medicare need either a supplemental insurance policy (Medigap) or a Medicare Advantage plan to manage their total healthcare spending.

Key Takeaways

  • Medicare Part A covers inpatient hospital stays, skilled nursing facility care, and hospice; Part B covers doctor visits and outpatient services; Part D covers prescription drugs; and Part C (Medicare Advantage) bundles Parts A, B, and D into one private plan.
  • Medicare does not cover dental care, vision care, hearing aids, long-term custodial care in nursing homes, or most preventive care like routine physicals — these gaps require separate insurance or out-of-pocket payment.
  • You pay a monthly premium for Part B and Part D, plus annual deductibles, copayments for each visit, and coinsurance (a percentage of the cost) for most services.
  • Medigap (supplemental insurance) and Medicare Advantage are two different ways to reduce your out-of-pocket costs, and choosing between them depends on your health needs and budget.
  • Enrollment important date exist: you must sign up for Part B and Part D when you first turn 65 or within specific windows, or you pay a permanent penalty.

What Medicare Part A, Part B, Part C, and Part D actually cover

Medicare Part A covers inpatient hospital care, including the cost of a hospital bed, meals, and basic nursing care during a hospital stay. It also covers skilled nursing facility care (not custodial care in a nursing home) for up to 100 days after a hospital stay, and hospice care for people with a terminal illness. Part A is funded through payroll taxes and has no monthly premium if you or your spouse paid Medicare taxes for at least 10 years.

Medicare Part B covers doctor visits, outpatient surgery, diagnostic tests, and some preventive services like cancer screenings and vaccines. It does not cover routine dental work, eye exams for glasses or contacts, or hearing aids. Part B costs a monthly premium (the amount varies by income) and requires you to pay a yearly deductible before Medicare starts paying its share. After you meet the deductible, you typically pay 20 percent of the cost for most services.

Medicare Part C, also called Medicare Advantage, is a private insurance plan offered by insurance companies that bundles Part A, Part B, and usually Part D into one plan. These plans often have lower premiums and out-of-pocket costs than Original Medicare (Parts A and B) plus a separate Medigap policy, but they restrict you to a network of doctors and hospitals. Some Medicare Advantage plans cover dental, vision, or hearing services that Original Medicare does not.

Medicare Part D covers prescription drugs. It is optional but important: if you do not sign up when you first turn 65 and you do not have other creditable drug coverage, you pay a permanent penalty for every month you delay. Part D plans vary widely in which drugs they cover and how much you pay, so comparing plans each year is necessary.

What Medicare does not cover — and why it matters

Medicare does not cover dental care, including cleanings, fillings, root canals, or dentures. It does not cover vision care such as eye exams, glasses, or contact lenses, or hearing aids and hearing exams. These three categories account for significant out-of-pocket costs for many older adults. You can purchase standalone dental, vision, and hearing insurance, or choose a Medicare Advantage plan that includes some of these benefits.

Medicare does not cover long-term custodial care in a nursing home or assisted living facility. It covers skilled nursing care (medical care provided by a nurse) for up to 100 days after a hospital stay, but not the cost of living in a facility if you need help with daily activities like bathing or eating. Long-term care insurance, Medicaid, or personal savings are the main ways people pay for this type of care.

Medicare does not cover most routine preventive care that is not specifically listed in the program. It covers certain cancer screenings, vaccines, and cardiovascular screenings, but not annual physical exams, routine blood work, or preventive care outside the approved list. Check the Medicare website or call 1-800-MEDICARE to confirm whether a specific service is covered before you schedule it.

How much you pay: premiums, deductibles, and coinsurance

If you have Original Medicare (Parts A and B), you pay a monthly premium for Part B, which varies by income. Most people pay the standard amount, but if your income is above a certain threshold, you pay more. You also pay an annual deductible for Part B before Medicare starts paying its share of costs. After you meet the deductible, you typically pay 20 percent coinsurance for most doctor visits and outpatient services.

Part A has a deductible for hospital stays, not a monthly premium. If you are admitted to the hospital, you pay the deductible for each benefit period (a benefit period begins when you enter the hospital and ends 60 days after you leave). If you stay longer than 60 days, you pay additional coinsurance for days 61 through 90, and even more for days 91 and beyond.

Part D (prescription drugs) has a monthly premium that varies by plan, an annual deductible, and then a tiered copayment system where you pay different amounts depending on which tier your drug falls into. Once your out-of-pocket costs reach a certain amount in a year, you enter the "catastrophic coverage" phase and pay a small copayment for the rest of the year.

Medicare Advantage plans have their own structure: they may have lower or no monthly premiums than Original Medicare plus Medigap, but they often have higher copayments per visit and require you to use in-network doctors. The out-of-pocket maximum is capped, meaning once you reach it, the plan pays 100 percent of covered costs for the rest of the year.

Medigap versus Medicare Advantage: which reduces your costs more

Medigap (supplemental insurance) is a private insurance policy that pays some or all of the costs that Original Medicare does not — deductibles, coinsurance, and copayments. If you choose Medigap, you keep your Original Medicare coverage and add the Medigap policy on top. You can see any doctor or hospital that accepts Medicare. Medigap plans are standardized by the federal government, so Plan G from one insurance company covers the same services as Plan G from another company, though the premium may differ.

Medicare Advantage is a different approach: instead of Original Medicare plus Medigap, you enroll in a private insurance plan that replaces Original Medicare entirely. The plan covers Parts A, B, and usually D, and often includes dental, vision, or hearing benefits. However, you must use doctors and hospitals in the plan's network, and you may need prior approval from the plan before certain services.

Which is cheaper depends on your health and where you live. Medicare Advantage plans often have lower monthly premiums, but if you have multiple chronic conditions and see many doctors, the copayments can add up quickly. Medigap plans have higher premiums but lower per-visit costs, so they work better for people who use healthcare frequently. There is no single right answer; you need to compare the plans available in your area and estimate your own healthcare costs.

Enrollment important date and penalties for missing them

You must enroll in Medicare Part B and Part D during specific windows, or you pay a permanent penalty. The main enrollment window is the three months before the month you turn 65, the month you turn 65, and the three months after. If you miss this window and do not have other creditable coverage, you pay a penalty for every month you delay.

The Part B penalty is 10 percent of the standard premium for every year you did not sign up. The Part D penalty is 1 percent of the national average Part D premium for every month you did not sign up. These penalties are permanent — they do not go away even after you finally enroll. If you are still working and covered by your employer's health plan, you may be able to delay enrollment without penalty, but you must notify Medicare of your creditable coverage status.

There is also an annual enrollment period from October 15 to December 7 each year when you can change your Medicare plan or add or drop coverage. If you miss the main enrollment window but enroll during the annual period, you do not pay a penalty, but your coverage does not start until January 1 of the following year.

Common misconceptions about what Medicare covers

A common misconception is that Medicare is "free" because you paid into it through payroll taxes. In reality, Medicare requires monthly premiums, annual deductibles, and copayments. The payroll taxes you paid help fund the program, but they do not cover the full cost of your care.

Another misconception is that Medicare covers all medical care. It does not. It covers hospital and doctor care, but not dental, vision, hearing, or long-term custodial care. Many people discover these gaps only when they need the service and learn they have to pay out of pocket.

Some people believe that once they turn 65 and enroll in Medicare, they do not need to do anything else. In reality, you need to choose between Original Medicare and Medicare Advantage, decide whether to add Medigap or a Medicare Advantage plan, and review your coverage every year during the annual enrollment period. Your health needs and the plans available in your area change, so what worked last year may not be the best choice this year.

Frequently Asked Questions

Do I have to enroll in Medicare when I turn 65?

Yes, if you are a U.S. citizen or permanent resident and have lived in the country for at least five years. You must enroll in Part A and Part B during the enrollment window around your 65th birthday, or you pay a permanent penalty. The only exception is if you are still working and covered by your employer's health plan.

Can I use any doctor with Medicare?

With Original Medicare (Parts A and B), yes — any doctor or hospital that accepts Medicare will see you. With Medicare Advantage, no — you must use doctors and hospitals in the plan's network, except in emergencies. Check the plan's provider directory before you enroll.

What is the difference between Medicare and Medicaid?

Medicare is a federal program for people 65 and older and some younger people with disabilities, regardless of income. Medicaid is a joint federal and state program for people with low income, regardless of age. They are separate programs with different rules, coverage, and costs.

Does Medicare cover preventive care?

Medicare covers certain preventive services like cancer screenings, vaccines, and cardiovascular screenings at no cost to you. It does not cover routine annual physical exams or general preventive care outside the approved list. Ask your doctor whether a specific service is covered before you schedule it.

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

If you do not have other creditable drug coverage, you pay a permanent penalty of 1 percent of the national average Part D premium for every month you delay. This penalty stays with you for life, even after you finally enroll. You can avoid the penalty by enrolling during the annual enrollment period, but your coverage does not start until January 1.