Robert Williams
Your Medicare card shows up in the mail on your 65th birthday, and you’re holding it thinking: “Okay, but what exactly does this cover?” I hear this question constantly. People paid into Medicare their whole working lives and still don’t know what they’re actually entitled to. The honest answer is that Medicare covers quite a lot, but it also has gaps that catch people off guard. Here’s what you need to know.
The Basic Building Blocks: Parts A and B
Medicare splits into parts, and knowing what each one does is everything.
Part A is hospital insurance. It covers inpatient hospital stays, skilled nursing facility care after a qualifying hospital stay, hospice, and some home health services. Most people don’t pay a monthly premium for Part A because they or their spouse paid Medicare taxes for at least 10 years (40 quarters). Haven’t hit that mark? You can still buy in, but talk to a State Health Insurance Assistance Program (SHIP) counselor first.
Part B is medical insurance. Doctor visits, outpatient care, preventive services, lab work, X-rays, wheelchairs, blood sugar monitors. Most medically necessary services fall here. Part B comes with a monthly premium that changes yearly. You’ll also pay a deductible, and Medicare then covers 80% of approved costs. You’re on the hook for the other 20%.
Together, these two parts are what people call “Original Medicare.” It’s been the traditional fee-for-service setup since 1965.
What Part A Actually Pays For (and When It Stops)
Hospital coverage gets tricky fast.
When you’re admitted as an inpatient, Part A covers your room, meals, nursing care, and most services and supplies. You pay a deductible upfront for each benefit period (check Medicare.gov for the current amount). After that: days 1 through 60 are fully covered. Days 61 through 90 require a daily coinsurance payment. Beyond day 90, you’re tapping into a limited pool of “lifetime reserve days,” and once those run out, you pay everything yourself.
Skilled nursing facility coverage works the same way. You need a qualifying inpatient hospital stay of at least three days first. Days 1 through 20 at a skilled nursing facility are covered in full. Days 21 through 100 require daily coinsurance. After day 100, Medicare pays nothing.
I’ve watched clients get blindsided by that 100-day limit. They assumed Medicare would cover a long nursing home stay forever. It won’t. Long-term custodial care, meaning help with bathing and dressing when you don’t need skilled medical services, isn’t covered at all. That’s where Medicaid or long-term care insurance takes over.
Hospice care is actually generous. If a doctor certifies a terminal illness with a life expectancy of six months or less, Medicare covers nearly all hospice services: nursing visits, pain management, counseling, family support. It happens at home or in a hospice facility, and out-of-pocket costs are minimal.
Helpful resource: MedCenter 31-Day Monthly Pill Organizer is a top-rated option for this. (As an Amazon Associate this site earns from qualifying purchases.)
What Part B Covers Day to Day
Part B is what you’ll probably use most.
Preventive care gets glossed over too often. Your “Welcome to Medicare” visit in your first year is free. Then you get a free Annual Wellness Visit every year. Part B also covers screenings with zero cost-sharing when done in-network: colorectal cancer, mammograms, bone density tests, cardiovascular screenings, diabetes screenings. All no charge.
For treatment, Part B covers medically necessary outpatient services. Regular doctor visits, specialists, physical therapy, mental health services, some outpatient surgeries, kidney dialysis. Durable medical equipment like CPAP machines and prosthetics too, when prescribed.
Outpatient mental health care surprises people. Medicare covers individual and group therapy, psychiatric evaluations, medication management. The same 80/20 cost split applies. Too many seniors skip it assuming Medicare won’t pay. It will.
What Part B doesn’t cover matters just as much. Routine dental, vision exams for glasses, hearing aids, most cosmetic procedures. Original Medicare excludes all of that. These gaps are real, and you should plan for them.
Part D: Prescription Drug Coverage
Original Medicare (Parts A and B) doesn’t cover most prescriptions you take at home. That’s Part D.
Part D plans come from private insurance companies approved by Medicare. You get a standalone Part D plan if you have Original Medicare, or it might be bundled into a Medicare Advantage plan. Each plan has a formulary, a list of covered drugs and their cost tiers. Generic drugs sit in lower tiers with lower copays. Specialty drugs land in higher tiers with bigger cost-sharing.
Understand the Extra Help program (Low Income Subsidy, or LIS). If your income and resources fall below certain thresholds, you may qualify for help paying Part D premiums, deductibles, and copays. This can save hundreds of dollars a year. Apply through the Social Security Administration.
If you take multiple prescriptions, comparing Part D plans before open enrollment closes each year is worth your time. The Medicare Plan Finder tool on Medicare.gov lets you plug in your exact medications and see what each plan costs annually.
Medicare Advantage (Part C): An Alternative Approach
| Feature | Original Medicare (Parts A & B) | Medicare Advantage (Part C) |
|---|---|---|
| Provider choice | Any provider accepting Medicare nationwide | Usually a network of providers |
| Referrals needed | Generally not required | Often required (HMO plans) |
| Part D coverage | Standalone plan required | Often included |
| Out-of-pocket maximum | None | Yes, capped annually |
| Coverage outside network | Yes | Limited or none |
Medicare Advantage plans, or Part C, are a different way to get Medicare benefits. Instead of Parts A and B from the federal government, you get them bundled through a private insurer.
Here’s what that looks like:
| Feature | Original Medicare (Parts A & B) | Medicare Advantage (Part C) |
|---|---|---|
| Provider choice | Any provider accepting Medicare nationwide | Usually a network of providers |
| Referrals needed | Generally not required | Often required (HMO plans) |
| Monthly premiums | Part B premium + any supplement | Part B premium + plan premium (sometimes $0) |
| Out-of-pocket maximum | No cap (Original Medicare alone) | Required annual out-of-pocket maximum |
| Prescription drugs | Requires separate Part D plan | Usually included |
| Extra benefits | Not included | Often includes dental, vision, hearing |
Medicare Advantage plans must cover everything Original Medicare covers by law. Many add extras that Original Medicare skips: dental cleanings, eyeglasses, hearing aids, fitness memberships, transportation to appointments. The trade-off is staying in a network and often needing referrals to see specialists.
Neither is universally better. It depends on your health needs, preferred doctors, budget, and where you live. Compare both paths carefully before deciding.
What Medicare Does Not Cover (And How to Fill the Gaps)
The gaps matter as much as the coverage.
Original Medicare’s biggest structural gap is no out-of-pocket maximum for Parts A and B. A serious illness with extended hospital stays and frequent specialist visits? Your 20% coinsurance can pile up to a very large number with no ceiling.
Most people fix this with a Medicare Supplement plan, or Medigap. These private plans pay Medicare’s cost-sharing: deductibles, coinsurance, copays. Plans are standardized by letter (Plan G and Plan N are popular), so a Plan G from one company covers the same things as Plan G from another. Price is the only real difference.
For a solid breakdown of Medigap options, the Medicare Supplement Insurance Guide is a helpful reference many clients find useful.
Beyond Medigap, these gaps trip people up consistently:
- Dental care: Routine cleanings, fillings, dentures, extractions. Not covered. Separate dental plans or Medicare Advantage dental benefits can help.
- Vision: Eye exams for glasses and the glasses themselves aren’t covered. Medically necessary care like cataract surgery is covered under Part B.
- Hearing: Hearing exams and hearing aids are excluded. This is expensive for many seniors.
- Long-term custodial care: Ongoing help with daily activities isn’t a Medicare benefit.
- Care outside the U.S.: Original Medicare generally doesn’t cover medical care in another country.
Medicare is a powerful safety net. Once you understand how it works, you can make smarter decisions about supplementing and completing your coverage. This article gives you a solid foundation, but your situation is unique. Don’t rely solely on what’s here. A free one-on-one session with a SHIP program counselor is one of the best things you can do before enrollment opens.
Sources & References
- Medicare.gov, What Medicare Covers, Official overview of Part A, Part B, and covered services
- CMS.gov, Medicare Benefits, Federal agency source on Medicare program structure and coverage
- SHIP National Technical Assistance Center, Confirms SHIP program for Medicare counseling assistance
Photo: RDNE Stock project via Pexels
This article is for informational purposes only. Medicare rules change annually. Always verify current plan details at Medicare.gov or by calling 1-800-MEDICARE (1-800-633-4227). This site does not sell insurance or recommend specific plans.
Recommended Resources
Disclosure: As an Amazon Associate, we earn a small commission from qualifying purchases at no extra cost to you. We only recommend products that genuinely support the topics covered in this article.
- Medicare For Dummies (~$22), The definitive consumer guide to Medicare, enrollment windows, Part A/B/C/D, and supplement plans.
- Get What’s Yours for Medicare (~$17), Maximize your Medicare benefits and minimize out-of-pocket costs. Covers Part D drug coverage gaps and Medigap in depth.
