Medicare pays for hospital stays, doctor visits, preventive screenings, prescription drugs, mental health care, and medical equipment, among other services. The program is split into distinct parts, each covering a different category of care, and understanding what falls where helps you anticipate both your coverage and your costs.
Part A: Hospital and Inpatient Care
Part A is hospital insurance. It covers inpatient stays in hospitals and critical access hospitals, skilled nursing facility care, hospice care, and some home health services. Most people don’t pay a monthly premium for Part A if they or a spouse paid Medicare taxes for at least 10 years (40 quarters). If you don’t qualify through work history, the premium in 2025 ranges from $285 to $518 per month depending on how many quarters of coverage you have.
What you do pay is a deductible for each hospital benefit period: $1,676 in 2025. That covers the first 60 days of a hospital stay. Days 61 through 90 come with a $419 daily coinsurance charge, and if you dip into lifetime reserve days beyond that, coinsurance jumps to $838 per day.
Skilled Nursing Facility Rules
Medicare covers skilled nursing facility care, but only after a qualifying inpatient hospital stay of at least three consecutive days. Time spent under “observation status” in the hospital doesn’t count toward those three days, which catches many people off guard. You also need to enter the facility within 30 days of leaving the hospital, and the skilled care must be related to your hospital stay. The first 20 days are fully covered. Days 21 through 100 require a daily coinsurance of $209.50 in 2025. After day 100, Medicare stops paying entirely.
One important exception: if your doctor participates in an Accountable Care Organization or another Medicare initiative with a skilled nursing facility waiver, the three-day requirement may not apply. Medicare Advantage plans can also waive it.
Part B: Doctor Visits and Outpatient Services
Part B covers two broad categories: medically necessary services and preventive care. On the medically necessary side, that includes doctor visits, outpatient procedures, ambulance services, mental health care, and limited outpatient prescription drugs. The standard Part B premium is $185 per month in 2025, with an annual deductible of $257. After you meet the deductible, you typically pay 20% of the Medicare-approved amount for covered services.
Part B also covers durable medical equipment when your doctor orders it for home use. This includes wheelchairs, walkers, CPAP machines, hospital beds, oxygen equipment, glucose monitors and supplies, crutches, and infusion pumps. The equipment must be medically necessary and expected to last at least three years. You pay 20% of the approved amount after your deductible.
If you use an insulin pump covered under Part B’s equipment benefit, your cost for a month’s supply of insulin for that pump is capped at $35, and the Part B deductible doesn’t apply to it.
Preventive Services at No Cost
One of Medicare’s most valuable features is its list of preventive services covered at zero cost to you, with no deductible or coinsurance, as long as your provider accepts Medicare assignment. The list is extensive:
- Cancer screenings: mammograms, colonoscopies, lung cancer screenings, cervical and vaginal cancer screenings, prostate cancer screenings, and several types of colorectal tests including stool DNA tests and CT colonography
- Cardiovascular screenings: cholesterol and lipid panels, plus behavioral therapy for heart disease prevention
- Diabetes care: diabetes screenings, self-management training, medical nutrition therapy, and the Medicare Diabetes Prevention Program
- Vaccines: flu shots, COVID-19 vaccines, pneumococcal shots, and hepatitis B shots
- Other screenings: depression, HIV, hepatitis B and C, glaucoma, bone density, abdominal aortic aneurysm, and sexually transmitted infections
- Counseling: alcohol misuse, tobacco cessation, and obesity behavioral therapy
- Wellness visits: a one-time “Welcome to Medicare” visit plus a yearly wellness visit
That yearly wellness visit is not the same as a routine physical exam. It’s a health risk assessment and personalized prevention plan. Routine physicals, notably, are on Medicare’s exclusion list.
Part D: Prescription Drug Coverage
Part D covers outpatient prescription drugs through private insurance plans that contract with Medicare. You can get Part D as a standalone plan alongside Original Medicare or bundled into a Medicare Advantage plan. Each plan has its own formulary (list of covered drugs) and its own premiums.
A major change took effect in 2025: the annual out-of-pocket cap for Part D drugs dropped to $2,000. Once you hit that threshold, you pay nothing for covered prescriptions for the rest of the year. The old “donut hole” coverage gap, where beneficiaries temporarily paid a larger share of drug costs, has been eliminated. During the initial coverage phase, you pay 25% coinsurance on covered drugs, with the plan and drug manufacturers splitting the rest. Once your out-of-pocket spending reaches $2,000, you enter the catastrophic phase and owe zero cost sharing.
Mental Health Coverage
Medicare covers both inpatient and outpatient mental health care. Part A pays for psychiatric hospitalizations. Part B covers outpatient services including individual and group psychotherapy, partial hospitalization programs, and intensive outpatient programs. Covered providers include psychiatrists, psychologists, clinical social workers, and, more recently, marriage and family therapists. After meeting your Part B deductible, you pay 20% of the approved amount for outpatient mental health visits.
Medicare Advantage: Additional Benefits
Medicare Advantage (Part C) is an alternative way to receive your Medicare benefits through a private insurer. These plans must cover everything Original Medicare covers, but most add supplemental benefits that Original Medicare does not offer. The majority of Medicare Advantage enrollees are in plans that include vision, hearing, and dental coverage. Many plans also offer fitness programs, over-the-counter health product allowances, transportation to medical appointments, and bathroom safety devices, though the availability of specific extras varies by plan and has shifted somewhat from year to year.
The tradeoff is that Medicare Advantage plans use provider networks, so you may need to see in-network doctors to keep costs low. They also set annual out-of-pocket maximums, which Original Medicare does not have.
What Medicare Does Not Cover
Original Medicare has notable gaps. It does not pay for:
- Long-term care: custodial care in a nursing home or assisted living facility
- Most dental care: routine cleanings, fillings, extractions, and dentures
- Vision for eyeglasses: eye exams for prescribing glasses and the glasses themselves
- Hearing aids: the devices and the exams to fit them
- Cosmetic surgery
- Massage therapy
- Routine physical exams (the yearly wellness visit is covered, but a traditional head-to-toe physical is not)
- Concierge or boutique medicine fees
These gaps are a primary reason many people add supplemental coverage. Medigap policies help cover cost-sharing in Original Medicare, while Medicare Advantage plans often bundle in dental, vision, and hearing benefits that would otherwise come entirely out of pocket.