What Does Medicare Cover in 2026? A Complete Guide to Benefits and Gaps

Medicare is one of the most important benefits available to Americans aged 65 and older, yet many people approach their enrollment without a clear understanding of what it actually covers — and where it leaves them exposed. Understanding the four parts of Medicare, what each one pays for, and what falls through the cracks is essential to making smart coverage decisions in retirement.

Medicare Part A — Hospital Insurance

Part A is often called hospital insurance. Most people who have worked and paid Medicare taxes for at least 10 years receive Part A without paying a monthly premium. It covers inpatient hospital care, skilled nursing facility care following a qualifying hospital stay, hospice care, and some home health services.

The 2026 Part A hospital deductible is $1,676 per benefit period. Importantly, this is per benefit period — not per year. If you are hospitalized, discharged, and then readmitted more than 60 days later, a new deductible applies.

Medicare Part B — Medical Insurance

Part B covers outpatient medical services — the visits and procedures that happen outside of a hospital stay. Unlike Part A, Part B requires a monthly premium. The standard premium in 2026 is $202.90 per month, though higher-income beneficiaries pay more through IRMAA surcharges.

After the annual Part B deductible of $257, Medicare pays 80% of approved costs for most services. You are responsible for the remaining 20% — with no annual cap on what that 20% could add up to. This is the most significant financial gap in Original Medicare.

Medicare Part C — Medicare Advantage

Part C, known as Medicare Advantage, is not a separate set of benefits — it is an alternative delivery mechanism. Instead of receiving your Part A and Part B benefits through Original Medicare, you receive them through a private insurance company that Medicare has approved and that Medicare pays on your behalf.

Medicare Advantage plans must cover everything that Original Medicare covers, and most plans offer additional benefits not available through Original Medicare — including dental, vision, hearing, and prescription drug coverage. They also impose an annual out-of-pocket maximum, which Original Medicare does not have.

The trade-off is that Medicare Advantage plans typically operate through networks of providers and may require prior authorization for certain procedures or referrals to see specialists.

Medicare Part D — Prescription Drug Coverage

Part D provides prescription drug coverage through private insurance companies that contract with Medicare. If you have Original Medicare with a Supplement plan, you typically add a separate Part D plan. Most Medicare Advantage plans include Part D coverage bundled in.

Part D plans have their own monthly premiums, deductibles, and cost-sharing structures. Each plan maintains a formulary — a list of covered drugs organized into tiers that determine what you pay. Higher-income beneficiaries pay an IRMAA surcharge on Part D in addition to their plan premium.

A major change took effect in 2025: the out-of-pocket cap on Part D drug costs is now $2,000 per year. Before this change, there was no limit on what beneficiaries could spend on prescriptions in a given year.

The Five Biggest Medicare Coverage Gaps

Understanding what Medicare does not cover is just as important as understanding what it does. The following gaps catch many retirees off guard:

1. Long-Term Care

Medicare's most significant coverage gap is long-term care. Medicare does not cover custodial care — the assistance with daily activities like bathing, dressing, toileting, and eating that makes up the majority of nursing home and assisted living care. Medicare will pay for skilled nursing facility care after a qualifying hospital stay, but only for up to 100 days and only while daily skilled care is needed. Once the skilled care need ends, so does Medicare coverage.

The average cost of a nursing home in New York exceeds $150,000 per year. Without long-term care insurance or significant personal savings, this cost falls entirely on the individual and their family.

2. Dental Care

Routine dental care is not covered by Original Medicare. Cleanings, fillings, extractions, root canals, and dentures all come entirely out of pocket unless you have a Medicare Advantage plan that includes dental benefits or a separate dental insurance policy. Many Medicare Advantage plans offer dental coverage, though the scope and quality of coverage varies significantly between plans.

3. Vision and Hearing

Routine eye exams for glasses and the cost of eyeglasses or contact lenses are not covered by Original Medicare. Routine hearing exams and hearing aids are also excluded. Given that vision and hearing loss are common in older adults, these gaps can represent significant out-of-pocket expenses. Some Medicare Advantage plans include vision and hearing benefits.

4. The 20% Coinsurance with No Cap

After you meet the Part B deductible, Original Medicare pays 80% of approved costs. You are responsible for the remaining 20%. There is no annual limit on this 20%. For someone undergoing cancer treatment, cardiac surgery, or other high-cost care, that uncapped 20% can amount to tens of thousands of dollars.

5. Care Outside the United States

Original Medicare generally does not cover healthcare received outside the United States. If you travel internationally or live part of the year abroad, you may face significant medical expenses without coverage. Some Medicare Supplement plans offer a foreign travel emergency benefit that covers 80% of emergency care costs abroad after a deductible.

2026 Medicare Cost Summary