Medicare is not one thing. It is a collection of parts, each covering something different, each with its own costs and rules. Understanding what Part A and Part B actually cover — and where each one stops — is the foundation of every Medicare decision you will make.
Part A covers inpatient hospital care, skilled nursing facility care (under specific conditions), hospice care, and some home health care. Think of it as what happens when you are admitted to a hospital or institutional setting.
Most people pay no monthly premium for Part A if they (or their spouse) worked at least 40 quarters (10 years) and paid Medicare taxes. If you have fewer quarters, you may pay a premium.
But "premium-free Part A" does not mean "cost-free Part A." In 2026, there is a $1,676 deductible per benefit period for inpatient hospital stays. After 60 days in the hospital, daily copays begin. Skilled nursing facility copays start on day 21. These gaps are why most people have a supplemental plan (Medigap or Medicare Advantage) on top of Original Medicare.
Part B covers outpatient medical care — what happens outside the hospital. Doctor visits, preventive care, lab tests, X-rays, durable medical equipment, outpatient surgery, and many other services fall under Part B.
In 2026, the standard Part B premium is $202.90 per month, deducted from your Social Security check. Higher-income beneficiaries pay more (see IRMAA). There is also an annual deductible ($257 in 2026), after which Medicare covers 80% of approved costs. You pay the remaining 20% — with no cap — unless you have a Medigap or Medicare Advantage plan.
That 20% coinsurance with no cap is why most people buy supplemental coverage. A $100,000 surgery means a $20,000 bill from Original Medicare alone. Supplemental coverage exists to cap or eliminate that exposure.
Part A handles hospital. Part B handles outpatient. Together, they cover a lot — but they leave gaps: no out-of-pocket maximum, no drug coverage, no routine dental/vision/hearing, and various deductibles and copays. Every Medicare decision you make from here — Medigap, Advantage, Part D — is about addressing those gaps in a way that fits your health situation and budget.
Reminder: Ready at 65 is not affiliated with Medicare, CMS, the SSA, or any government agency. This article is general educational information, not financial, legal, medical, or insurance advice. Rules, costs, and deadlines change — verify current details at Medicare.gov or by calling 1-800-MEDICARE before making any decision. Full disclaimer →