The Three Parts of Medicare Coverage

Medicare has four separate parts, and each one covers different things. Part A covers hospital stays, skilled nursing care, and hospice. Part B covers doctor visits, outpatient care, and medical equipment. Part D covers prescription drugs. Part C (Medicare Advantage) is an alternative to A and B offered by private insurance companies — it covers everything A and B cover, but often through a network of doctors and hospitals you must use.

Most people who turn 65 are automatically enrolled in Part A and Part B. Part D is optional but comes with a penalty if you sign up late. Part C is also optional and replaces Part A and B if you choose it. What each part actually pays for depends on whether you have met your deductible, whether the service is considered preventive or routine, and whether the provider accepts Medicare.

Key Takeaways

  • Part A covers hospital inpatient stays, skilled nursing facilities, and hospice care, but you pay a deductible and coinsurance for longer stays.
  • Part B covers doctor office visits, outpatient surgery, lab tests, and medical equipment, after you meet a yearly deductible and pay 20 percent coinsurance.
  • Part D covers prescription drugs through a separate plan you choose, with different drugs on different formularies depending on which plan you pick.
  • Preventive services like annual wellness visits, cancer screenings, and vaccines are covered at no cost if you use an in-network provider.
  • Medicare does not cover dental, vision, hearing aids, or long-term custodial care, though some Medicare Advantage plans offer limited dental and vision benefits.

What Part A Covers: Hospital and Facility Care

Part A pays for inpatient hospital stays, skilled nursing facility care, home health services, and hospice. An inpatient hospital stay means you are admitted to the hospital and stay overnight. Part A covers your room, meals, nursing care, and most tests and medications while you are there. You pay a deductible for each benefit period (the deductible amount changes yearly), and then Medicare pays 100 percent of covered costs for the first 60 days. After 60 days, you pay coinsurance — a daily amount that increases the longer you stay.

Skilled nursing facility care is different from a regular nursing home. It is care you receive after a hospital stay when you need daily nursing or rehabilitation services. Medicare covers up to 100 days per benefit period, but only if you were hospitalized for at least three days first. You pay nothing for days 1 through 20, and then a daily coinsurance amount for days 21 through 100. Home health services — nursing care, physical therapy, or medical equipment delivered to your home — are covered at no cost if a doctor orders them and you are homebound.

What Part B Covers: Doctor Visits and Outpatient Care

Part B covers doctor office visits, emergency room visits, outpatient surgery, diagnostic tests like X-rays and blood work, and durable medical equipment like wheelchairs and oxygen. It also covers mental health services, physical therapy, and some preventive screenings. You pay a yearly deductible, and then Medicare pays 80 percent of the approved amount for most services. You pay the remaining 20 percent, called coinsurance.

The key word is "approved amount." Medicare sets a fee for each service, and that is the amount the coinsurance is based on. If your doctor does not accept Medicare, you may owe more. Preventive services — like an annual wellness visit, mammograms, colonoscopies, blood pressure checks, and flu shots — are covered at 100 percent with no deductible if you see an in-network provider. This means you pay nothing out of pocket for these visits.

What Part D Covers: Prescription Drugs

Part D is prescription drug coverage you purchase separately from a private insurance company. Medicare does not run Part D itself — instead, it approves plans offered by insurers, and you choose which plan to join. Each plan has its own list of covered drugs, called a formulary. A drug covered by one plan may not be covered by another, or it may be in a different tier with a different cost to you.

Part D plans have a deductible (usually $100 to $500 per year), and then you pay a copay or coinsurance for each prescription. Once you and your plan together spend a certain amount on drugs in a year, you enter the "donut hole" — a coverage gap where you pay a higher percentage of the drug cost. After you spend enough out of pocket to reach the catastrophic coverage threshold, Medicare pays most of the cost for the rest of the year. If you do not sign up for Part D when you first become may be able to access at 65, you pay a penalty for each month you delay, even if you sign up later.

What Medicare Does Not Cover

Medicare does not cover dental care, vision care, or hearing aids. This includes routine cleanings, fillings, dentures, eyeglasses, contact lenses, and hearing aid fittings. It also does not cover long-term custodial care — the daily information with bathing, dressing, and eating in a nursing home or assisted living facility. Cosmetic surgery, weight loss surgery (unless medically necessary), and most fertility treatments are not covered.

Some services are covered only in specific situations. For example, Medicare covers cataract surgery but not routine eye exams or glasses to correct vision. It covers hearing tests ordered by a doctor for medical reasons but not hearing aids themselves. If you need these services, you can purchase a supplemental insurance plan (called Medigap) to cover some of the gaps, or you can choose a Medicare Advantage plan, which sometimes includes limited dental and vision benefits.

How Deductibles and Coinsurance Work

Each part of Medicare has its own deductible — the amount you must pay out of pocket before Medicare starts paying. For 2024, Part A has a deductible of $1,632 per benefit period, Part B has a deductible of $240 per year, and Part D deductibles vary by plan. Once you meet the deductible, you typically pay coinsurance — a percentage of the cost — rather than the full amount.

For Part B, you pay 20 percent coinsurance after the deductible. For Part A, you pay coinsurance only if you stay in the hospital longer than 60 days or in a skilled nursing facility longer than 20 days. The coinsurance amounts are set by Medicare and change yearly. If you have a supplemental Medigap plan, it may cover your deductible and coinsurance, which means you pay little or nothing out of pocket.

Preventive Services at No Cost

Medicare Part B covers many preventive services at no cost — meaning no deductible and no coinsurance — if you see a provider who accepts Medicare. These include an annual wellness visit with your primary care doctor, cancer screenings (mammograms, colonoscopies, Pap tests), cardiovascular screenings, diabetes screenings, bone density tests, and vaccines (flu, pneumonia, shingles, COVID-19). You also get a one-time "Welcome to Medicare" preventive visit when you first enroll.

The catch is that these services must be ordered or performed by a provider who accepts Medicare assignment — meaning they accept Medicare's approved amount as full payment. If you see an out-of-network provider, you may owe more. Additionally, if your doctor finds a problem during a preventive visit and orders additional testing or treatment, that follow-up care is not preventive and you will owe your deductible and coinsurance.

Frequently Asked Questions

Does Medicare cover my prescription for blood pressure medication?

Only if you have Part D coverage and the medication is on your plan's formulary. Part A and Part B do not cover outpatient prescription drugs. You must enroll in a Part D plan to have prescription coverage, and each plan covers different drugs at different costs. Check your plan's formulary or call the plan to confirm your specific medication is covered.

Will Medicare pay for my annual eye exam and glasses?

No. Medicare does not cover routine eye exams, eyeglasses, or contact lenses. It covers cataract surgery and some eye conditions related to diabetes or age-related macular degeneration, but not the exam or corrective lenses. If you need vision coverage, you can purchase a Medigap supplemental plan or choose a Medicare Advantage plan that includes vision benefits.

What happens if I see a doctor who does not accept Medicare?

You may owe more than the standard coinsurance. If the doctor does not accept Medicare at all, you pay the full bill and submit it yourself for reimbursement — Medicare will only reimburse what it considers the approved amount, leaving you responsible for the difference. Always ask your doctor's office whether they accept Medicare before your visit.

Does Medicare cover nursing home care?

Medicare covers skilled nursing facility care for up to 100 days after a hospital stay of at least three days, but only if you need daily nursing or rehabilitation services. It does not cover long-term custodial care — help with daily activities like bathing and dressing in a nursing home or assisted living facility. Medicaid may cover custodial care if you meet income and asset limits, but Medicare does not.

What is the difference between Medicare and Medicare Advantage?

Original Medicare is Part A and Part B run by the federal government. Medicare Advantage (Part C) is an alternative offered by private insurance companies that covers everything A and B cover, but usually through a specific network of doctors and hospitals. Medicare Advantage plans often include Part D drug coverage and may offer dental or vision benefits, but you typically pay more if you see out-of-network providers.