Medicare Part A and Part B Coverage

The complete breakdown of hospital and medical benefits under Original Medicare.

Quick Answer

Medicare Part A covers inpatient hospital stays, skilled nursing care, hospice, and limited home health. Part B covers outpatient doctor visits, preventive services, ambulance rides, and durable medical equipment. Original Medicare does not cover routine dental, vision, hearing, or long-term care.

Original Medicare forms the foundation of federal health coverage for older Americans. Administered directly by the federal government, it is split into two primary segments: Part A (hospital insurance) and Part B (medical insurance). Understanding exactly what these two parts cover � and what they exclude � is essential to avoiding unexpected medical bills. We looked into the official 2026 CMS guidelines and benefit schedules to outline what you need to know.

What this article covers:

  • The specific hospital and inpatient services covered by Part A
  • The medical, outpatient, and preventive services covered by Part B
  • Deductibles, coinsurance rates, and premiums for both parts in 2026
  • The primary exclusions that require alternative coverage
  • How “observation status” can lead to unexpected out-of-pocket bills

Understanding Part A and Part B: What the Official Rules Actually Say

Medicare Part A and Part B are established under Title XVIII of the Social Security Act. They operate as a fee-for-service system, meaning Medicare pays healthcare providers directly for each covered service you receive.

Medicare Part A is designed to cover inpatient care. Under CMS rules, a service is covered under Part A if you are formally admitted to a hospital or skilled nursing facility as an inpatient under a doctor’s order. The care must be medically necessary to treat your illness or injury. Part A also pays for hospice care for terminally ill beneficiaries and part-time skilled home health visits for homebound patients.

Medicare Part B is designed to cover outpatient medical services. This includes any care you receive that does not require formal hospital admission. Part B covers doctor appointments, outpatient surgeries, emergency room visits, physical therapy, diagnostic lab tests, X-rays, ambulance services, and durable medical equipment (DME). It also covers a wide range of preventive services, such as annual wellness exams, cardiovascular screenings, and immunizations.

Original Medicare has no network restrictions. You can visit any physician, hospital, or clinic in the United States, provided they accept Medicare enrollees.

The Plain English Version

  • Part A covers care when you are formally admitted as an inpatient in a hospital or skilled nursing facility
  • Part B covers doctor visits, outpatient clinics, emergency rooms, tests, and medical equipment
  • You can use any doctor or hospital in the country who accepts Medicare patients
  • Preventive care (like flu shots or cancer screenings) is usually free under Part B
  • Neither Part A nor Part B covers routine dental, vision, or long-term nursing home stays

Who This Applies To: The Rules of Eligibility

Original Medicare coverage applies to specific categories of beneficiaries:

Yes � You Are Eligible to Receive Covered Benefits If:

  • You are a U.S. citizen or legal permanent resident (living in the U.S. for at least 5 consecutive years) and are age 65 or older, or
  • You are under 65 and have received Social Security Disability Insurance (SSDI) benefits for 24 months, or
  • You have been diagnosed with End-Stage Renal Disease (ESRD) requiring dialysis or a transplant, or
  • You have Amyotrophic Lateral Lateral Sclerosis (ALS / Lou Gehrig’s disease)

It Depends � Premium Costs Varies by Work History:

While eligibility is the same, your premium cost for Part A depends on your tax history. If you or your spouse paid Medicare taxes for 40 quarters (10 years) of work, you receive Part A premium-free. If you do not meet this requirement, you must pay a monthly Part A premium of up to $565. Part B requires a monthly premium from all enrollees, regardless of work history.

No � You Cannot Receive Medicare Coverage If:

  • You do not meet the age, disability, or residency criteria
  • You have not enrolled in Part A or Part B (you must actively sign up during your enrollment windows unless you already receive Social Security benefits)

?? Real-Life Scenario

A Hip Replacement, SNF Rehabilitation, and the Costs That Applied

Helen, 72 � Michigan Retired librarian | Hip replacement patient | Original Medicare + Plan G

Helen had a hip replacement in February 2026 requiring a 4-day inpatient hospital admission. Medicare Part A applied the $1,736 benefit-period deductible on day one; days 2�4 carried $0 additional daily coinsurance. After discharge, her orthopedic surgeon ordered 18 days of inpatient rehabilitation at a Skilled Nursing Facility. Because Helen had a qualifying 3-day inpatient hospital admission, days 1�20 of SNF care were covered at $0 per day under Part A. She had Medigap Plan G, which reimbursed her $1,736 Part A deductible in full. Her total out-of-pocket cost for the hospital stay and 18 SNF days: $0 due to Plan G coverage.

Key Numbers in This Case:
  • 2026 Part A deductible per benefit period: $1,736 (due on day 1)
  • Hospital days 2�60 coinsurance: $0/day
  • SNF days 1�20: $0/day (requires qualifying 3-day inpatient stay)
  • SNF days 21�100: $217/day coinsurance
  • Helen's Plan G Medigap: covered the full $1,736 deductible � leaving her at $0 out-of-pocket
?? Key Takeaway: Plan A covers far more than most people realize � but the Skilled Nursing Facility benefit is tied specifically to a qualifying inpatient (not observation) hospital admission, so always confirm your admission status while in the hospital.

The Numbers: 2026 Costs and Coinsurance Rules

Coverage Area 2026 Deductible / Premium Enrollee Coinsurance (What You Pay)
**Part A: Inpatient Hospital Stay** $1,736 deductible per benefit period Days 1-60: $0; Days 61-90: $434/day; Days 91-150: $868/day
**Part A: Skilled Nursing Facility** Requires prior 3-day hospital admission Days 1-20: $0; Days 21-100: $217/day; Days 101+: 100% of costs
**Part A: Hospice Care** $0 monthly cost $0 for services; up to $5 per prescription for symptom control
**Part B: Monthly Premium** $202.90 standard premium Varies by income (higher if single income > $106,000)
**Part B: Annual Deductible** $283/year Must be met before Part B coverage begins
**Part B: Outpatient & Doctor Care** Applies after Part B deductible 20% of the Medicare-approved amount (no annual cap)
**Part B: Durable Medical Equipment** Applies after Part B deductible 20% of the Medicare-approved amount

Source: CMS 2026 Medicare Parts A & B Premiums and Deductibles Announcement

What Most Sources Don’t Tell You: The “Observation Status” Cost Trap

Here is a financial risk that many Medicare guides skip over: staying overnight in a hospital bed does not guarantee your stay is covered under Part A.

Hospitals frequently place patients under “observation status” while they run tests to determine if you are sick enough to be admitted as an inpatient. Under CMS rules, observation status is classified as an outpatient service. Therefore, your care is billed under Part B, not Part A.

This distinction has two major financial consequences:

  1. Outpatient Cost Sharing: Instead of paying the flat Part A deductible ($1,736 in 2026), you are billed for outpatient services under Part B. You must meet your Part B deductible and pay a 20% coinsurance for each individual doctor visit, test, and drug administered while in the hospital.
  2. Skilled Nursing Facility Loss: Medicare Part A only covers rehabilitative care in a skilled nursing facility if you have a qualifying inpatient stay of at least three consecutive days. Observation days do not count toward this three-day requirement. If you are discharged to a skilled nursing facility after three days of observation, Medicare pays $0, leaving you responsible for the entire cost of the facility stay.

Hospitals are legally required to provide you with a written notice called the Medicare Outpatient Observation Notice (MOON) if you receive observation services for more than 24 hours. However, the notice does not change your billing category.

?? Common Mistakes to Avoid

? Mistake 1: Being Placed on Observation Status Instead of Inpatient Status Without Realizing the Difference

The Medicare SNF benefit is available only after a qualifying inpatient hospital stay of at least 3 consecutive days. Observation status, even if you spend multiple nights in a hospital bed, is classified as outpatient care. Many seniors discover this distinction only after discharge, when they receive a bill for 100% of their SNF costs � which can reach $400+ per day.

? What to Do Instead:
  • When admitted to a hospital, ask the admissions staff directly: "Am I being formally admitted as an inpatient, or am I being placed under observation status?"
  • If you are placed under observation, ask your doctor whether you can be reclassified to inpatient admission given your medical condition � in many cases this is clinically appropriate.
  • If observation status is maintained and you want to challenge it, request a formal review through the hospital's case manager or file a "Beneficiary and Family Centered Care QIO" complaint at medicare.gov/contacts.

? Mistake 2: Assuming All Hospital Stays Automatically Trigger the SNF Benefit

Some seniors assume that any stay of a few days in the hospital automatically qualifies them for covered SNF care following discharge. The rule is strict: 3 full consecutive calendar days as an admitted inpatient � not counting the discharge day. A 2-night stay, even if medically justified, does not meet this threshold.

? What to Do Instead:
  • Before agreeing to a SNF transfer after a hospital stay, confirm with the hospital case manager that your admission qualifies as at least 3 calendar days of inpatient status.
  • Ask the hospital to provide you with a written "Medicare Inpatient Admission Confirmation" before discharge so you have documentation if a claim is denied later.
  • If you are transferred to a SNF and then told your hospital stay was insufficient, you have the right to receive written notice of the denial (called a "Notice of Medicare Non-Coverage") and to request a fast-track appeal.

? Mistake 3: Not Understanding That Part B Has No Annual Out-of-Pocket Cap on Its Own

Medicare Part B covers 80% of approved outpatient services, leaving you responsible for 20% with no annual limit on that 20%. For a senior who needs extensive outpatient treatment � chemotherapy, cardiac rehabilitation, physical therapy � the uncapped 20% coinsurance can accumulate to tens of thousands of dollars in a serious illness year. Many seniors are not aware of this exposure until they receive large bills.

? What to Do Instead:
  • If you are on Original Medicare without a Medigap plan, calculate your maximum 20% exposure for any planned treatment � your doctor's office can provide an estimate of the total Medicare-approved charges.
  • Consider enrolling in a Medigap policy to cap this exposure � Plan G covers the 20% coinsurance entirely after the $283 annual deductible.
  • If Medigap is not available to you due to underwriting, explore whether a Medicare Advantage plan with a defined annual out-of-pocket maximum would provide more predictable costs.

What You Can Do: Navigating Out-of-Pocket Liability

  1. Ask the hospital staff directly: If you or a loved one are hospitalized, ask the attending physician or case manager daily: “Is this stay classified as observation or inpatient?” Request that they change the status to inpatient if medically justified.

  2. Understand the 20% coinsurance risk: Original Medicare does not carry an annual out-of-pocket maximum limit. If you have a serious illness and require $100,000 in outpatient treatment, your 20% share is $20,000.

  3. Consider buying a Medigap plan: To cover these out-of-pocket gaps, you can buy a Medicare Supplement Insurance (Medigap) policy during your initial enrollment period. Popular options like Plan G pay your 20% Part B coinsurance and the Part A hospital deductible.

  4. Verify doctor participation: Before scheduling any outpatient procedure, ask the provider’s billing office: “Do you accept Medicare assignment?” If they accept assignment, they agree to accept the Medicare-approved rate as full payment, preventing them from billing you for extra charges.

  5. Utilize the State Health Insurance Assistance Program (SHIP): If you receive a bill you believe is incorrect or need help understanding your coverage options, contact your state’s SHIP at shiphelp.org for free, unbiased assistance.

Common Questions

Does Medicare cover routine dental or vision services?

No. Original Medicare does not cover routine dental cleanings, fillings, dentures, routine eye exams, or eyeglasses. If you need coverage for these services, you must purchase a separate private policy or enroll in a Medicare Advantage (Part C) plan that offers these extras.

What is covered under home health care?

Part A and Part B cover home health visits if you are homebound and require part-time or intermittent skilled nursing care, physical therapy, or occupational therapy. It does not cover 24-hour home care, meal delivery, or personal custodial care (like bathing or dressing) if that is the only care you need.

Does Medicare cover prescription drugs?

Original Medicare (Parts A and B) does not cover outpatient prescription drugs. You must enroll in a standalone Medicare Part D plan or choose a Medicare Advantage plan that includes prescription drug coverage to avoid penalties and pay for your medications.

What is a Medicare benefit period?

A benefit period begins the day you are admitted as an inpatient in a hospital or skilled nursing facility. It ends after you have not received any inpatient hospital or skilled nursing care for 60 consecutive days. If you are admitted again after 60 days, a new benefit period begins, and you must pay the Part A deductible again.

Does Medicare Part B cover emergency room visits?

Yes. Part B covers emergency room visits and ambulance transportation when other methods of transportation could endanger your health. You pay the annual Part B deductible ($283 in 2026) and 20% of the Medicare-approved amount for the services.

State and Regional Variations

While Medicare Parts A and B are federal programs with identical coverage nationwide, the administration of claims is split among regional private insurance companies known as Medicare Administrative Contractors (MACs). Each MAC writes Local Coverage Determinations (LCDs) that define whether specific new treatments or tests are covered in their region, resulting in minor differences in coverage depending on where you live.

Local Coverage Note: If you are considering a specialized medical treatment or test, ask your provider's office to check if there is an active Local Coverage Determination for that service in your state. This ensures you do not face a denied claim after the procedure is completed.

Your Original Medicare Coverage Checklist

  • Verify if your provider accepts Medicare assignment to avoid excess charges
  • Ask if any hospital stay is billed as "inpatient" or "observation outpatient"
  • Confirm you have met your annual Part B deductible ($283 in 2026) before expecting coinsurance to start
  • Look into a Medigap plan during your initial enrollment period to limit your out-of-pocket exposure
  • Find alternative coverage for routine dental, vision, and hearing services
Educational Disclaimer: This article is for educational purposes only. Seniors Audit is not a licensed insurance agent, financial advisor, or legal advisor. Medicare plan costs, availability, and rules change annually. Always verify current information at medicare.gov or by calling 1-800-MEDICARE (1-800-633-4227) before making medical or financial decisions.

Sources Used in This Article

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