What does Medicare cover? The short answer: more than you would think, but less than you would hope.
Medicare is the health insurance program that covers most Americans at age 65, and it handles a remarkable amount — hospital stays, doctor visits, surgeries, lab work, preventive screenings, durable medical equipment, mental health services, and prescription drugs. But there are gaps in the coverage that catch people off guard every single year, and some of those gaps are enormous. No dental. No long-term care. No hearing aids under Original Medicare. An open-ended 20 percent copay with no annual cap.
We wrote this guide because the official Medicare handbook is 128 pages long and reads like it was written by committee (it was). What follows is the same information in plain English — what each part of Medicare covers, what it costs you, and where the holes are. We will also cover how to fill those holes, because that is usually the more important question.
Part A: Hospital Insurance
Medicare Part A covers inpatient care — the kind that happens inside a hospital or skilled nursing facility. Most people do not pay a monthly premium for Part A because they (or their spouse) paid Medicare taxes for at least 10 years while working.
What Part A Covers
- Inpatient hospital stays — semi-private room, meals, nursing care, drugs administered during your stay, lab tests, surgeries, and intensive care
- Skilled nursing facility care — up to 100 days after a qualifying hospital stay of at least three days (not 100 days of free care — see costs below)
- Home health care — part-time skilled nursing care, physical therapy, and occupational therapy ordered by a doctor, as long as you are homebound
- Hospice care — comfort care for terminally ill patients with a life expectancy of six months or less, including medications for pain management, counseling, and respite care for family caregivers
- Inpatient psychiatric care — up to 190 days in a psychiatric hospital over your lifetime
What Part A Costs You in 2026
- Premium: $0 for most people (you paid in through payroll taxes)
- Deductible: $1,676 per benefit period — this is what you pay before Part A kicks in for a hospital stay
- Days 1–60 in the hospital: $0 after the deductible
- Days 61–90: $419 per day coinsurance
- Days 91+: You enter “lifetime reserve days” (you get 60 total, ever), with $838 per day coinsurance
- Skilled nursing facility: $0 for days 1–20; $209.50 per day for days 21–100; you pay everything after day 100
That deductible resets every benefit period, not every calendar year. A benefit period starts when you are admitted and ends when you have been out of the hospital or nursing facility for 60 consecutive days. If you are in and out of the hospital multiple times with less than 60 days between stays, it counts as one benefit period. If there is a 60-day gap and you are readmitted, a new benefit period starts — and you pay the deductible again.
Part B: Medical Insurance
Part B is outpatient and physician services — everything that happens outside of an inpatient hospital stay. Unlike Part A, everyone pays a monthly premium for Part B.
What Part B Covers
- Doctor visits — primary care, specialists, surgeons
- Outpatient surgery and procedures
- Lab tests and diagnostic imaging — blood work, X-rays, MRIs, CT scans
- Preventive services — annual wellness visits, flu shots, pneumonia shots, COVID vaccines, mammograms, colonoscopies, diabetes and cardiovascular screenings, depression screening, and more — all at $0 out of pocket if you use an in-network provider
- Durable medical equipment — wheelchairs, walkers, hospital beds, oxygen equipment, blood sugar monitors
- Ambulance services — when medically necessary
- Mental health services — outpatient counseling, psychiatry, and partial hospitalization
- Physical, occupational, and speech therapy
- Some home health services — when ordered by a doctor
What Part B Costs You in 2026
- Premium: $185.00 per month (standard; higher earners pay more through IRMAA surcharges)
- Deductible: $257 per year
- After the deductible: You pay 20 percent of the Medicare-approved amount for most services
That 20 percent is the number that keeps financial advisors up at night. In Original Medicare, there is no annual out-of-pocket maximum on Part B costs. If you have a $200,000 surgery, you owe $40,000. If you need expensive cancer treatments, the 20 percent adds up with no ceiling. This is the primary reason Medigap supplemental insurance exists.
Part C: Medicare Advantage
Medicare Advantage is not a separate “part” of Medicare in the same way A and B are. It is an alternative delivery system. Instead of getting coverage directly from the federal government (Original Medicare), you enroll in a private health plan — run by companies like UnitedHealthcare, Humana, or Anthem — that contracts with Medicare to provide all of your Part A and Part B benefits, and usually Part D as well.
How It Differs from Original Medicare
- Networks: Most Medicare Advantage plans use HMO or PPO networks. You may need referrals to see specialists, and going out of network can cost significantly more (or not be covered at all in an HMO).
- Out-of-pocket maximums: Medicare Advantage plans are required to cap your annual out-of-pocket costs. The federal limit for 2026 is $8,850 for in-network services. This is a huge advantage over Original Medicare, which has no cap.
- Extra benefits: Many plans include dental, vision, hearing aids, fitness programs (like SilverSneakers), over-the-counter product allowances, and even meal delivery after a hospital stay. These extras are the main draw for many enrollees.
- Prior authorization: Medicare Advantage plans may require prior authorization for certain procedures, tests, or specialist visits. Original Medicare does not.
For a deeper look at whether Advantage makes sense for you, read our full Medicare Advantage guide.
Part D: Prescription Drug Coverage
Part D covers outpatient prescription drugs. It is available as a standalone plan (paired with Original Medicare) or built into most Medicare Advantage plans.
How Part D Works
Every Part D plan has a formulary — a list of covered drugs organized into tiers. Lower tiers (generics) have lower copays. Higher tiers (brand-name and specialty drugs) cost more. Not every plan covers every drug, so checking the formulary before you enroll is essential.
The Coverage Gap (Donut Hole)
The donut hole is the most confusing feature of Part D, and it still exists in a modified form. In 2026, after you and your plan have spent a combined total on covered drugs (the initial coverage limit), you enter a gap phase where your cost-sharing changes. The Inflation Reduction Act has been closing this gap — in 2025, a $2,000 annual cap on out-of-pocket Part D costs took effect, which is a dramatic improvement for people on expensive medications.
What Part D Costs
- Premium: Varies by plan; the national average is about $40 to $55 per month
- Deductible: Up to $590 in 2026 (some plans have a lower deductible or none)
- Copays: Vary by drug tier and plan
The Big Gaps: What Medicare Does Not Cover
This is the section that matters most for financial planning. Medicare was designed in 1965 and has been updated many times, but it still does not cover several categories of care that older adults frequently need.
Dental Care
Original Medicare does not cover routine dental — no cleanings, fillings, root canals, crowns, or dentures. The only exception is dental work that is medically necessary as part of a covered procedure (for example, jaw reconstruction after an accident). This gap affects roughly 47 percent of Medicare enrollees who have no dental coverage at all.
Vision Care
No routine eye exams. No glasses. No contacts. Medicare Part B covers a narrow set of eye-related services — annual glaucoma screening for high-risk individuals, diabetic retinopathy exams, and cataract surgery (plus one pair of corrective lenses after surgery). Everything else is out of pocket.
Hearing Aids
Original Medicare does not cover hearing aids or the fitting exams that go with them. Given that roughly one-third of adults between 65 and 74 have hearing loss, this is a significant gap. Some Medicare Advantage plans now include hearing aid benefits — our hearing aids and Medicare guide covers the details.
Long-Term Care
This is the gap that devastates families financially. Medicare does not pay for long-term stays in nursing homes, assisted living communities, or extended home care for help with daily activities. The short-term skilled nursing benefit (up to 100 days after a hospital stay) is not the same thing. For ongoing, custodial care — help with bathing, dressing, eating, and moving around — Medicare offers nothing.
The average nursing home stay costs about $116,000 per year. Assisted living averages about $54,000. Without long-term care insurance, Medicaid eligibility, or substantial savings, these costs can exhaust a lifetime of retirement planning in just a few years.
Care Outside the United States
With very limited exceptions (emergency care in Canada under narrow circumstances), Medicare does not cover health care received outside the country. If you travel internationally, you need supplemental travel insurance.
How to Fill the Gaps
You have several options for patching Medicare’s holes, and most people use at least one.
Medigap (Medicare Supplement Insurance)
Medigap policies are sold by private insurers and cover some or all of the costs that Original Medicare leaves behind — the 20 percent Part B coinsurance, the Part A deductible, hospital copays for long stays, and skilled nursing coinsurance. Plans are standardized by letter (Plan G is the most popular), so the coverage is identical no matter which company sells it. Only the premium varies.
Medigap does not cover dental, vision, hearing aids, or long-term care. It is strictly designed to cover the cost-sharing gaps in Parts A and B.
Standalone Dental Insurance
Individual dental insurance plans for seniors typically cost $25 to $60 per month and cover preventive care (cleanings, X-rays) immediately, with waiting periods of 6 to 12 months for major services like crowns and root canals. Some plans have annual benefit caps of $1,000 to $2,000.
Vision and Hearing Aid Coverage
Standalone vision plans cost $10 to $25 per month and cover annual exams plus an allowance for glasses or contacts. For hearing aids, some Medicare Advantage plans now offer coverage of $500 to $3,000 per ear — worth checking if hearing loss is a concern. Over-the-counter hearing aids, which became available in 2022, cost $200 to $1,000 per pair and do not require a prescription.
What Surprises People Most About Medicare
After talking to hundreds of new Medicare enrollees, these are the things that catch people off guard most consistently:
The 20 percent with no cap. People who are used to employer insurance with a $5,000 or $8,000 out-of-pocket max are shocked to learn that Original Medicare has no such limit. A serious illness can cost tens of thousands out of pocket without a Medigap policy.
Part A is not free. The premium is $0 for most people, but the deductible ($1,676 per benefit period) is not. Multiple hospital admissions in a year can mean paying that deductible more than once.
Skilled nursing is not long-term care. The 100-day skilled nursing benefit requires a prior hospital stay of at least three days, only covers the first 20 days fully, and ends completely after day 100. Families who expected Medicare to cover a nursing home for years are left scrambling.
Preventive care is free — but only if coded correctly. An annual wellness visit is $0. But if your doctor addresses a specific complaint during that visit and the claim is coded as a diagnostic visit instead of a preventive one, you will get a bill. Always confirm how the visit will be coded before your appointment.
Medicare Advantage is not always cheaper. Low premiums and extra benefits are appealing, but network restrictions, prior authorization requirements, and the risk of higher costs for serious illnesses mean Advantage is not automatically the better deal. Run the numbers based on your actual health needs.
Where to Start
If you are approaching 65 or helping a parent who just enrolled, here is the priority order:
- Understand what Original Medicare covers (you just did that)
- Decide between Original Medicare plus Medigap versus Medicare Advantage
- Choose a Part D plan based on the specific medications you take
- Address dental, vision, and hearing gaps with supplemental coverage
- Have an honest conversation about long-term care planning — whether that means insurance, savings, or Medicaid planning
Medicare is powerful, but it is not complete. Knowing where the coverage ends is how you avoid the bills that catch families by surprise.