What Does Medicare Cover?

As of March 2023 , 65 million people are enrolled in Medicare. That’s around 18.7 percent of the US population.
Medicare brings valuable benefits to millions of people, but most don’t even know what it covers.   Whether you’re 65 or just getting started with Medicare, it can feel like you’re navigating a maze. There’s so much to keep track of—premiums, enrollment dates, deductibles, and more.

Knowing the basics of this program can help you maximize your benefits.   Medicare is split into different parts, each covering specific types of health services. By becoming familiar with what Medicare covers, you can better plan for your future healthcare needs.

Medicare has four main parts. Part A covers inpatient hospital stays, skilled nursing facility care, and some home health care. Medicare Part B includes outpatient care, doctor services, and some preventive services. Together, Parts A and B are often called Original Medicare.

Since Original Medicare has its gaps, Part C offers an alternative. Also known as Medicare Advantage, it offers a combined package of Part A and Part B with some additions like vision and dental coverage. This plan is typically offered by private insurance companies.  Lastly, we have Medicare Part D. This part is for prescription drug coverage. You can add it to Original Medicare or get it through a Medicare Advantage plan that includes drug coverage.

If you need to be admitted to a hospital due to surgery, Medicare Part A (hospital insurance) has your back. You are covered for up to 90 days for each benefit period. Your benefit period begins on the admission day and ends after you've been out of the facility for 60 days.

Any hospital-related expenses, including room fees and meals, are typically covered by Part A hospital insurance.

Once you meet your deductible, Original Medicare pays in full for days 1 to 60 that you are in a hospital. For days 61 to 90, you will pay daily coinsurance.  If your stay extends beyond 90 days, you can tap into your 60 lifetime reserve days. These are extra days covered by Medicare, but they come with a daily coinsurance and aren't renewable.

Hospital insurance also covers services provided in a skilled nursing facility (SNF). This includes room and board, administration of medications, and wound care.

In each benefit period, Medicare will cover your expenses for up to 100 days. To qualify for SNF coverage, you must spend at least three days as an inpatient within 30 days of being admitted to an SNF.  Limits and conditions apply, so make sure to check out Medicare’s website to learn about Medicare Part A coverage.

If you or a loved one are facing a terminal illness, hospice care can provide comfort and support. It focuses on palliative care rather than curative treatment.

Medicare hospital insurance covers four levels of hospice care: routine home care, continuous home care, general inpatient care, and respite care.   You’ll pay nothing as long as your doctor or other health care provider certifies you need hospice care. Once your hospice benefit starts, Medicare will cover the associated costs, including medical, emotional, and spiritual support.

Also known as medical insurance, Part B helps you manage your healthcare by covering any doctors' services or supplies that are medically necessary. These include regular check-ups, outpatient services, and diagnostic tests such as x-rays and lab work.

If you have diabetes or high blood pressure, Part B medical insurance will cover your regular doctor visits to help manage these issues.   You automatically qualify for Medicare Part B if you’re eligible for premium-free Part A. However, you’ll pay monthly premiums for Part B, as well as out-of-pocket costs like deductibles, copays, and coinsurance.

Lastly, we have prescription drug coverage. If you're on Original Medicare, you can sign up for Medicare Part D.
Each plan has its formulary or a list of drugs it covers. Usually, you'll pay less for generic drugs compared to brand-name ones. For example, if you take medication for cholesterol, your Part D plan could help cover some of the costs.

Just be aware of the coverage gap, often called the "donut hole." This coverage gap means you’ll pay more for your drugs after you've reached the temporary limit.  While Medicare Part D is optional, make sure you enroll the first time you become eligible. If you delay enrollment, you could face a Part D penalty. This will increase your monthly premiums, making your healthcare more expensive in the long run

Original Medicare doesn't cover everything, so you’ll have some out-of-pocket costs like deductibles, copayments, and coinsurance.

While Medicare Part A covers hospital stays, you usually have to pay a deductible first. Part B covers doctor visits and outpatient care but comes with a monthly premium and 20% coinsurance for most services. These copayments or coinsurance costs can add up quickly.

To help with these costs, many people opt for a Medigap policy or Medicare supplement insurance. These are offered by private companies and help cover the gaps in Original Medicare.  There are different Medigap plans labeled A through N, each offering various levels of coverage. While the benefits offered under Medigap are standardized, premium rates vary by state and zip code.