Sleuthing Through the Alphabet World of Medicare: What Part A and Part B Actually Cover

Staff November 3, 2026

Ask a couple of simple questions — “What does Medicare actually pay for?” — “What will it cost me?”

And somehow you end up drowning in letters, A, B, C, D….. and if you wander into Medigap territory, G and N show up too. It can feel like you’ve landed in a country where everyone speaks fluent Alphabet and you’re still working on your vowels.

Good news: you don’t need to learn the whole alphabet today. You just need the first two letters. Part A and Part B are the foundation of Original Medicare, regulated by the federal government. Once you understand how they fit together, the rest of the alphabet gets a lot less intimidating.

Part A and Part B of Medicare are also the basis of coverage if you enroll in a privately run Medicare Advantage health plan. By law, all those plans cover the same services as the traditional Medicare Part A and Part B program. Medicare Advantage plan may also provide more coverage (i.e., extra benefits), but they cannot provide few benefits.

Whether you’re brand new to this, a few years in and due for a refresher, or fluent in Medicare-speak and just here to double-check a detail, this article is built for you to use however you need it.

New to Medicare? Start at the top and read straight through — think of it as a coverage detective kit. Been at this a while? Jump straight to the section you need from the table of contents below.

A word about Medicare Cost Plans: These plans are sold by private insurance companies, but their availability is very limited. They are primarily sold in a few Midwestern states, and they do not always accept new members. An applicant must have Part B coverage to enroll. The cost plans offer more flexibility in choosing a Part D plan as well as using out-of-network healthcare providers. To find if one is available in your area, click here.

Something to note:

A note about annual figures: Some dollar amounts in this article reflect the most recently available official figures; others are projected estimates for 2027. We labeled each so you know which is which. In the meantime, though the exact figures will change, the existing figures can help you begin your research, understand your options, and prepare for decisions ahead. We will update the article once the figures are released.

First, the Big Warning About Out-of-Pocket Costs
Part A Coverage at a Glance
Part A: What Does It Actually Cover?
Part B Coverage at a Glance
Part B: What Does It Actually Cover?
The Part B Drug Mystery
High-Income Earners Part B Surcharge
One Phrase You Really Need to Know: “Assignment”
When the Bill Doesn’t Make Sense
The Big Picture: A and B Are the Foundation — Not the Whole House

First, the Big Warning About Out-of-Pocket Costs

Original Medicare Has No Annual Out-of-Pocket Maximum

Unlike most employer health plans and Affordable Care Act (ACA) plans, Original Medicare does not put a yearly ceiling on what you can spend from your own pocket for covered Part A and Part B services.

For Part B, once you meet the annual deductible, you generally pay 20% of Medicare’s approved amount for covered services — and there’s no annual dollar limit on that 20% under Original Medicare itself. And that is the reason people add supplemental coverage, such as a Medigap policy to help manage that cost-sharing.

Another option is Medicare Advantage (Part C) — a private-plan alternative that still covers Part A (hospital) and Part B (medical) services, but with an annual out-of-pocket limit built in, though the rules and costs work differently than Original Medicare.

The bottom line: Medicare covers a lot. But Original Medicare doesn’t automatically put a lid on what you can spend.

Part A: Coverage at a Glance

Service	Covered	Not Covered
Inpatient hospital care	Semi-private room, meals, nursing, lab tests, X-rays, medications, blood transfusions, and supplies. You pay a projected $1,788 deductible in 2027 covering a 60-day stay; after that, a daily copay applies until day 150, when coverage ends and you pay all costs.	A private room (unless medically necessary), personal convenience items (phone, TV), and stays that are for custodial care only
Home health care	Part-time or intermittent skilled nursing, physical or occupational therapy, ordered by your doctor when you’re homebound. Typically, no deductible or coinsurance applies	24-hour home care, meal delivery, homemaker services, and custodial care when that’s the only care needed
Hospice care	For those who meet Medicare’s eligibility requirements, including physician certification of a terminal illness. Includes pain and symptom management, nursing care, counseling, and certain related medications and equipment	Room and board if you’re living at home (Medicare generally covers it during certain inpatient hospice stays)
Skilled nursing facility (SNF)	Up to 20 days following a 3-day inpatient hospital stay; coinsurance kicks in on day 21	Long-term custodial nursing home care — help with bathing, dressing, daily living — is not covered at any length of stay

The takeaway: The amount you pay for Part A hospital care depends on how long your stay lasts and where you are in the benefit period. Deductible and coinsurance amounts change yearly, so check current numbers when planning ahead, but don’t bother memorizing them. Just understand the structure: Part A isn’t simply “Medicare pays the hospital bill”.

Part A: What Does It Actually Cover?

Part A covers inpatient hospitalizations, short-term stays in skilled nursing facilities, some home health care, and hospice care. Most people who are receiving Social Security retirement benefits before they turn 65 are automatically enrolled in Part A when they turn 65.

Most people don’t pay a monthly premium for Part A because they (or a spouse) have enough qualifying work history. But “premium-free” doesn’t mean “free.” Part A can still come with deductibles, coinsurance, and other costs.

If you do not have enough work history to get premium-free Part A, you will have to buy it. In 2027, you’ll pay either $311 or $565 each month for Part A, depending on how long you or your spouse worked and paid Medicare taxes. Plan ahead and understand your credit status. Earning enough credits during your work years will bear fruit in the long run to more affordable healthcare coverage in retirement.

One Detail Worth Knowing: The Benefit Period

Here’s a piece of Medicare vocabulary worth learning, because it can directly affect your wallet: the benefit period.

The Part A hospital deductible is not an annual deductible — it applies per benefit period. A benefit period begins when you’re admitted to a hospital as an inpatient, and it ends once you’ve been out of the hospital (and out of skilled nursing care) for 60 consecutive days.

Why does that matter? Unlike most insurance deductibles, you can owe more than one Part A deductible in the same calendar year.

Example: Say you’re hospitalized in January and meet your Part A deductible. You recover and go more than 60 days without another inpatient or skilled nursing stay. Then in October, you’re hospitalized again. That second admission can start a new benefit period — meaning a second Part A deductible. Don’t assume “I already paid my hospital deductible this year” means you’re covered for the rest of the year. Part A’s deductible is tied to benefit periods, not the calendar.

Part B: Coverage at a Glance.

Service	Covered	Not Covered
Doctor and health care providers	Visits with primary care doctors and specialists, consultations, and second opinions — 80% after deductible	Concierge or membership fees; routine physicals beyond the covered wellness visit
Outpatient hospital and mental health care	Outpatient procedures, ER visits when you aren’t admitted, outpatient mental health therapy and counseling — 80% after deductible	Long-term residential mental health treatment (inpatient psychiatric hospital care falls under Part A, which has its own lifetime limit)
Nursing care	Skilled nursing services delivered as part of doctor-ordered home health care	Custodial or round-the-clock home nursing care
Medical equipment and supplies	Durable medical equipment — wheelchairs, walkers, oxygen equipment, CPAP machines, glucose monitors, hospital beds, infusion pumps — when prescribed, 80% after deductible	Equipment bought for convenience rather than medical necessity; supplies not ordered by a provider
Diagnostic and lab services	Medically necessary physician-ordered tests and imaging, subject to Medicare’s rules	Screenings not ordered by a doctor; experimental tests
Ambulance service and emergency care	Medically necessary ground or air transport to the nearest appropriate facility, plus ER care — 80% after deductible	Transportation for convenience, or transport to a facility farther than medically necessary
Drugs	A narrow category: drugs administered by a provider — chemotherapy infusions, injectable osteoporosis medication, injectable/infused drugs, ESRD drugs, HIV prevention drugs — 80% after deductible	Most prescription drugs picked up at a pharmacy and taken at home (that’s Part D’s job)
Preventive care and screening	Many preventive services — annual wellness visit, cancer screenings, vaccines, mammograms, diabetes and depression screening, HIV screening — covered at 100% with no deductible or copay, when your provider accepts assignment	Services performed more often than Medicare allows, or that don’t meet Medicare’s coverage requirements (medical services performed during a screening—e.g., polyp removal during a screening colonoscopy—are covered at 80%

Planning a procedure? Medicare’s Procedure Price Lookup tool can give you a sense of costs before the bill arrives — worth a look ahead of any planned, non-emergency procedure.

Part B: What Does It Actually Cover?

If Part A is the hospital side, think of Part B as the doctor-and-outpatient side.

Part B generally covers outpatient services outside the hospital—doctors, outpatient care, appointments, medical equipment, laboratory tests, and preventive care such as vaccinations and cancer screenings.

The basic Part B cost formula: You pay the Part B deductible → Medicare generally pays 80% of the Medicare-approved amount → you generally pay the remaining 20%. There is no cap on your yearly spending.

“Generally” is doing some work in that sentence. Some services have different cost-sharing rules, and many preventive services are covered at 100% when Medicare’s requirements are met.

Quick check: Don’t assume that your 20% share of drug costs would stop at some ceiling. It doesn’t. 
In order to avoid unpleasant surprises and keep your costs down: (1) review your policy each year, 
to determine whether it is worthwhile to take on more financial risk or (2) look into purchasing 
a standalone Part D private drug insurance plan to help cover the Part B cost.

To terminate the Part B, you need to file form 1763.

Trade-off: Though enrollment in Part B is not mandatory once you turn 65, delaying it incurs a mandatory 
lifetime monthly enrollment penalty in addition to the plan premium.

Part B also has:

A monthly premium
An annual deductible (projected to be from $292 to $310 for 2027).
Potentially higher premiums for people whose income triggers IRMAA, the Income-Related Monthly Adjustment Amount (see our IRMAA article for more)

Premiums and deductibles change periodically — use current figures rather than one you remember from a prior year.

The Part B Drug Mystery

Part B does cover some drugs — just not the ones you’d expect. It generally does not cover medications you pick up at a pharmacy and take at home (that’s Part D’s job, see our Part D article) It may cover drugs that are:

Injected or infused in a medical setting
Administered by a health care professional
Used in connection with certain medical conditions or treatments
Otherwise specifically tied to a covered treatment

So don’t assume “it’s a prescription, so it must be Part D” — and don’t assume “it’s a drug, so Medicare doesn’t cover it.” The details matter here.

High-Income Earners Part B Surcharge

High-income Medicare enrollees are required to pay an extra monthly fee (called a surcharge) for Part B services on top of the standard fee, if your income is above a specified level. The Part B surcharge (called IRMMA) is based on your income as shown on your tax return filed 2 years earlier (i.e., for example, 2027 surcharges are based on 2025 tax returns).

For example, the additional surcharge could be the result of the sale of your home, an inheritance, stock sale, or an IRA distribution. But the good news, the premium increase may not permanent because IRMMA calculates the premium surcharge every year based on income shown on your tax return for 2 years earlier You will also receive a notice from Social Security of the assessment of IRMMA. You can appeal the determination by filing form SSA-44.

Editor’s note: The article uses 2026 Medicare figures. Updated 2027 amounts are scheduled for release 
in mid-November. Before making a final decision, confirm current costs at SSA.gov.

2026 Medicare Part B IRMAA Brackets, Surcharges & Premiums

Single Tax Filer (2024 Income)	Married Filing Jointly (2024 Income)	Married Filing Separately (2024 Income)	Monthly Part B Surcharge	Total Monthly Part B Premium
$109,000 or less	$218,000 or less	$109,000 or less	$0.00	$202.90
$109,001 – $137,000	$218,001 – $274,000	Not Applicable	$81.20	$284.10
$137,001 – $171,000	$274,001 – $342,000	Not Applicable	$202.90	$405.80
$171,001 – $205,000	$342,001 – $410,000	Not Applicable	$324.60	$527.50
$205,001 – $499,999	$410,001 – $749,999	$109,001 – $390,999	$446.30	$649.20
$500,000 or more	$750,000 or more	$391,000 or more	$487.00	$689.90

One Phrase You Really Need to Know: “Assignment”

A doctor’s office telling you “yes, we take Medicare” is helpful — but what you actually want to know is whether the doctor accepts Medicare assignment.

Accepts assignment: The provider takes Medicare’s approved amount as full payment for the covered service. After deductibles, you generally pay your share (often 20% under Part B) — and Medicare pays the rest.
Doesn’t accept assignment: They can still see Medicare patients, but may charge more than Medicare’s approved amount, subject to Medicare’s rules and the limiting charge. That extra amount can land on you.

Before scheduling non-emergency care, ask: “Do you accept Medicare assignment?”

When the Bill Doesn’t Make Sense

Medical bills can be confusing even when everything’s processed correctly — an unfamiliar charge, a service you don’t remember receiving, an unexpected amount, an unrecognized provider name, or a gap between what was billed and what Medicare says is allowed. Don’t panic — start your detective work here:

Start with the provider. Call the billing office. A surprising number of “problems” are ordinary coding or billing errors, dates of service, insurance information, or duplicate charges.
Check your Medicare Summary Notice (MSN). Sent every six months (or monthly, if you’ve opted for electronic), it’s not a bill — its Medicare’s explanation of what was submitted, approved, paid, and what you may owe. Look for anything that seems off.
Check your supplemental insurance explanation. If you have a Medigap policy — Plan G, for instance — your insurer’s Explanation of Benefits (EOB) shows how the claim was processed. Don’t assume the provider’s bill tells the whole story.
Still stuck? If you’ve contacted the provider and reviewed your Medicare paperwork and the problem remains, contact Medicare directly at 1-800-MEDICARE (1-800-633-4227).

Some billing problems fall under the No Surprises Act, but not every dispute qualifies. It depends on the circumstances.

The Big Picture: A and B Are the Foundation — Not the Whole House

Part A and Part B are Original Medicare — but they’re not all of Medicare. There are real gaps. Original Medicare generally does not cover:

Most routine dental care
Most routine eye exams for glasses
Hearing aids
Most long-term custodial care
Most prescription drugs you take at home

And even when Medicare covers something, “covered” doesn’t mean “free.” That’s why the rest of the alphabet matters:

Part D deals primarily with prescription drug coverage.
Medigap letters like G and N describe supplemental policies designed to help with certain Original Medicare cost-sharing.
Privately-run Medicare Advantage (Part C) is a different way of receiving your Medicare benefits, through a private Medicare-approved plan.

We’ll tackle each of those separately.

Continue the series:

[Medicare Basic] · [Part D] · [Medigap] · [Medigap Plans: G, N, K, and L] · [Medicare Advantage Plans] · [Financial Assistance] · [Appeals]