Medicare 101: How Does Medicare Work?

Currently, you pay the first $257 yearly for Part B-covered services or items.

Medicare Part B is essentially an 80-20 plan.

That is, Medicare will pay 80 percent of the cost of Part B-approved services (up to a specific amount). You are responsible for the remaining 20 percent, plus any excess charges your physician may charge over and above the Medicare-approved amount.

Again, unless you enroll in a Medigap plan, a Medicare Advantage plan, or the Medi-Share 65+ health sharing plan, there is no cap on your out-of-pocket liability for medical costs.

That 20% coinsurance can add up to hundreds of thousands per year in some cases.

Medicare Part B covers blood transfusions you receive as an outpatient. You are responsible for the cost of the first three units of blood you receive in a calendar year.

The three-unit “blood deductible” does not apply to other blood components platelets, plasma, or serum albumin.

Medicare Part B covers medically necessary clinical lab services.

“Medically necessary” means the item or service is needed for the diagnosis or treatment of your medical condition.

Medicare Part B also covers services that help prevent or lessen complications from a condition you already have, find health problems early when treatment works best, or manage a medical problem.

Medicare Part B covers a one-time screening ultrasound for people at risk.

Medicare only covers this screening if you get a referral for it as a result of your one-time “Welcome to Medicare physical exam. See “Physical Exam.”

Generally, you may be considered high risk for AAA if you are a male between ages 65 and 75 and you have smoked significantly, or you have a family history of this condition.

You pay 20% of the Medicare-approved amount.

Emergency ground transportation when you need to be transported to a hospital or skilled nursing facility for medically-necessary services, and transportation in any other vehicle could endanger your health.

Medicare will pay for transportation in an airplane or helicopter if you require immediate and rapid ambulance transportation that ground transportation can’t provide.

In some cases, Medicare may pay for limited non-emergency transportation if you have orders from your doctor.

Medicare will only cover services to the nearest appropriate medical facility that is able to give you the care you need.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Facility fees for approved surgical procedures provided in an Ambulatory Surgical Center (facility where surgical procedures are performed, and the patient is released within 24 hours).

You pay 20% of the Medicare-approved amount (except for screening flexible sigmoidoscopies and screening colonoscopies, for which you pay 25%), and the Part B deductible applies.

You pay all facility charges for procedures Medicare doesn’t allow in ambulatory surgical centers.

In most cases, the provider gets blood from a blood bank at no charge, and you won’t have to pay for it or replace it.

However, you will pay a copayment for the blood processing and handling services for every unit of blood you get, and the Part B deductible applies.

If the provider has to buy blood for you, you must either pay the provider costs for the first 3 units of blood you get in a calendar year or have the blood donated by you or someone else.

You pay a copayment for additional units of blood you get as an outpatient (after the first 3), and the Part B deductible applies.

Bone density scans, also called “DEXA scans” help to detect osteoporosis, and to see if you are at risk for broken bones.

This service is covered once every 24 months (more often if medically necessary) for people who have certain medical conditions or meet certain criteria.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Lipid panel tests detect conditions that may lead to a heart attack or stroke.

Medicare Part B covers a lipid panel every 5 years to test your cholesterol, lipid, and triglyceride levels.

There’s no cost for the test itself, but you generally have to pay 20% of the Medicare-approved amount for the doctor’s visit.

Medicare Part B helps pay for chiropractic treatment to correct a subluxation (when one or more of the bones of your spine move out of position) using manipulation of the spine.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Medicare Part B Includes certain blood tests, urinalysis, some screening tests, and more, usually at no cost to you.

Clinical research studies test different types of medical care, like how well a cancer drug works.

They help doctors and researchers see if the new care works and if it’s safe. Medicare covers some costs, like doctor visits and tests, in qualifying clinical research studies.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

• Fecal Occult Blood Test-Once every 12 months if age 50 or older. No cost for the test, but you generally have to pay 20% of the Medicare-approved amount for the doctor’s visit.
• Flexible Sigmoidoscopy-Generally, once every 48 months if age 50 or older, or 120 months after a previous screening colonoscopy for those not at high risk. You pay 20% of the Medicare-approved amount..
• Colonoscopy-Generally once every 120 months (high risk every 24 months) or 48 months after a previous flexible sigmoidoscopy. No minimum age. You pay 20% of the Medicare-approved amount.
• Barium Enema—Once every 48 months if age 50 or older (high risk every 24 months) when used instead of a sigmoidoscopy or colonoscopy. You pay 20% of the Medicare-approved amount.

Do People on Medicare Need a Cancer Policy?

Note: If you get a screening flexible sigmoidoscopy or screening colonoscopy in an outpatient hospital setting or an ambulatory surgical center, you pay 25% of the Medicare-approved amount.

For some people diagnosed with heart failure. You pay 20% of the Medicare approved amount for the doctor’s services.

You pay a copayment but no more than the Part A hospital stay deductible if you get the device as a hospital outpatient. The Part B deductible applies.

These screenings are covered if you have any of the following risk factors: high blood pressure (hypertension), history of abnormal cholesterol and triglyceride levels (dyslipidemia), obesity, or a history of high blood sugar (glucose).

Tests are also covered if you answer yes to two or more of the following questions:

• Are you age 65 or older?
• Are you overweight?
• Do you have a family history of diabetes (parents, siblings)?
• Do you have a history of gestational diabetes (diabetes during pregnancy), or did you deliver a baby weighing more than 9 pounds?

Based on the results of these tests, you may be eligible for up to two diabetes screenings every year.  

There’s no cost for the test, but you generally have to pay 20% of the Medicare-approved amount for the doctor’s visit.

Medicare and Diabetes: What You Need to Know

Medicare Part B covers diabetes self-management training sessions for people with that condition. Your doctor or other healthcare provider must provide a written order.

Medicare coverage up to 10 hours of initial training – 1 hour of individual training and 9 hours of group training.

You may also qualify for up to 2 hours of follow-up training each calendar year after the year you got your initial training.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Including blood sugar testing monitors, blood sugar test strips, lancet devices and lancets, blood sugar control solutions, and therapeutic shoes in some cases).

Insulin is covered only if used with an insulin pump.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Note: Insulin and certain medical supplies used to inject insulin, such as syringes, may be covered by Medicare prescription drug coverage (Part D).

Services that are medically necessary include outpatient and some doctor services you get when you are a hospital inpatient) or covered preventive services.

Doesn’t cover routine physicals except for the one-time “Welcome to Medicare physical exam. See “Physical Exam.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Items such as oxygen equipment and supplies, wheelchairs, walkers, and hospital beds your doctor orders for use in the home.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies. You must get your covered equipment or supplies from a supplier enrolled in Medicare.

You should also check if the supplier is a participating supplier. Participating suppliers must accept assignment, and your out-of-pocket costs may be less.

Includes semi-private room, meals, skilled nursing and rehabilitative services, and other services and supplies (only after a 3-day minimum inpatient hospital stay for a related illness or injury).

To qualify for care in a skilled nursing facility, your doctor must certify that you need daily skilled care like intravenous injections or physical therapy. Medicare doesn’t cover long-term care or custodial care in this setting.

Medicare covers a one-time screening EKG or ECG if you get a referral for it as a result of your one-time “Welcome to Medicare physical exam. See “Physical Exam.”

An EKG is also covered as a diagnostic test.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

When you believe your health is in serious danger. You may have a bad injury, a sudden illness, or an illness that quickly gets much worse. 

You pay a specified copayment for the hospital emergency department visit, and you pay 20% of the Medicare-approved amount for the doctor’s services. The Part B deductible applies.

Medicare covers an eye exam to check for diabetic retinopathy once every 12 months by an eye doctor who is legally allowed by the state to do the test.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

One pair of eyeglasses with standard frames (or one set of contact lenses) after cataract surgery that implants an intraocular lens.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Medicare benefits include many outpatient primary care and preventive services you get through certain community-based organizations.

You pay 20% of the Medicare-approved amount.

Helps prevent influenza or flu virus. Covered once a flu season in the fall or winter. You need a flu shot for the current virus each year.

No cost to you for the flu shot if the doctor accepts assignment for giving the shot.

If you have diabetes-related nerve damage and/or meet certain conditions. You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Medicare covers a glaucoma screening eye exam once every 12 months for people at high risk for glaucoma.

You are considered high risk for glaucoma if you have diabetes, a family history of glaucoma, are African-American and age 50 or older, or are Hispanic and age 65 or older.

An eye doctor who is legally authorized by the state must do the tests. You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Medicare will help pay for hearing/audiological exams If your doctor orders one to see if you need medical treatment.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Note: Medicare doesn’t cover hearing aids and exams for fitting hearing aids.

The Hepatitis B vaccine protects you from getting Hepatitis B, a serious disease of the liver. Medicare covers the Hepatitis B vaccine for people at high or medium risk for Hepatitis B.

Your risk for Hepatitis B increases if you have hemophilia, End-Stage Renal Disease (ESRD), or a condition that increases your risk for infection.

Other factors may increase your risk for Hepatitis B, so check with your doctor. You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Under Medicare, home care coverage is limited to medically-necessary part-time or intermittent skilled nursing care, or physical therapy, speech-language pathology, or a continuing need for occupational therapy.

A doctor must order it, and a Medicare-certified home health agency must provide it.

Home health services may also include medical social services, part-time or intermittent home health aid services, durable medical equipment, and medical supplies for use at home.

To qualify, you must be homebound, which means that leaving home requires a major effort. No cost to you for home health services.

For Medicare-covered durable medical equipment, you pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Medicare provides benefits for people with End-Stage Renal Disease (ESRD), or permanent kidney failure.

Medicare covers dialysis either in a facility or at home when your doctor orders it.

Medicare Part B also covers transplant drugs after a covered transplant, as well as most dialysis drugs.

Transplants and Medicare Coverage

If you only have Medicare because of ESRD (i.e., you are not yet age 65 and would not otherwise be eligible for Medicare) your Medicare coverage will terminate  36 months after your successful kidney transplant.

However, Medicare does have a program that helps pay for immunosuppressive drugs beyond that 36-month period.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Medicare may cover kidney disease education services if you have kidney disease, and your doctor refers you for the service.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Mammograms are a type of X-ray used to screen for breast cancer. Medicare covers screening mammograms once every 12 months for all women with Medicare age 40 and older.

Medicare covers one baseline mammogram for women between ages 35-39. You pay 20% of the Medicare-approved amount.

Medicare may cover medical nutrition therapy and certain related services if you have diabetes or kidney disease, or you have had a kidney transplant in the last 36 months, and your doctor refers you for the service.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Medicare Part A covers psychiatric hospitalization as it does any other hospital stay.

Medicare Part B covers services generally given outside a hospital or in a hospital outpatient department, including visits with a doctor, psychiatrist, clinical psychologist, or clinical social worker, and lab tests.

Certain limits and conditions apply.

What you pay will depend on whether you are being diagnosed and monitored or whether you are getting treatment.

• For visits to a doctor or other healthcare provider to diagnose your condition, or to monitor or change your prescriptions, you pay 20% of the Medicare-approved amount.
•  For outpatient treatment of your condition (such as counseling or psychotherapy), you pay 20% of the Medicare-approved amount. This co-payment will continue to decrease over the next 3 years.

Note: The Part B deductible applies for both visits to diagnose or monitor your condition as well as treatment.

Talk to your doctor if you feel sad, have little interest in things you used to enjoy, feel dependent on drugs or alcohol, or have thoughts about ending your life.

Medicare covers services provided by non-physicians, such as physician assistants and nurse practitioners.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Medicare Part B helps pay for evaluation and treatment to help you return to usual activities (such as dressing or bathing) after an illness or accident when your doctor certifies you need it.

There may be limits on physical therapy, occupational therapy, and speech-language pathology services and exceptions to these limits.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Services you get as an outpatient as part of a doctor’s care.

You may pay more for a doctor’s care in an outpatient department of a hospital than you will pay for the same care in a doctor’s office.

You pay a specified copayment for each service. The copayment can’t be more than the Part A hospital stay deductible. The Part B deductible applies.

For approved procedures (like X-rays, a cast, or stitches).

You pay a copayment for each service you get in an outpatient hospital setting. For each service, this amount can’t be more than the Part A hospital stay deductible. 

The Part B deductible applies, and you pay all charges for items or services that Medicare doesn’t cover.

Checks for cervical, vaginal, and breast cancers.

Medicare covers these screening tests once every 24 months, or once every 12 months for women at high risk, and for women of child-bearing age who have had an exam that indicated cancer or other abnormalities in the past 3 years.

There is no cost to you for the Pap lab test. You pay 20% of the Medicare-approved amount for Pap test specimen collection, and pelvic and breast exams.

Medicare covers a one-time review of your health, and education and counseling about preventive services, including certain screenings, shots, and referrals for other care if needed.

For Medicare to pay for it, you must schedule the visit within the first 12 months you have Part B.

There’s no out-of-pocket cost for the visit itself. There’s no deductible, copay, or coinsurance. But you may have to pay a deductible plus 20% of the cost of labs, tests, or other procedures or services your doctor provides or arranges during your Welcome to Medicare visit.

When you make your appointment, let your doctors office know that you would like to schedule your “Welcome to Medicare physical exam.

Medicare covers evaluation and treatment for injuries and diseases that change your ability to function when your doctor certifies your need for it.

Physical therapy services must have the goal and potential of improving function, slowing the decline of function, to qualify for coverage.

There may be limits on these services and exceptions to these limits.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

These shots help prevent pneumococcal infections (like certain types of pneumonia).

Most people only need this preventive shot once in their lifetime.

There’s no cost if the doctor or supplier accepts assignment for giving the shot.

The vast majority of prescription drugs are covered under Part D.

But Medicare Part B does include a very limited number of drugs. Examples include:

• Injections you get in a doctor’s office
• Certain oral cancer drugs,
• Drugs used with some types of durable medical equipment (like a nebulizer or infusion pump
• A very limited number of drugs you may get in a hospital outpatient department.

You pay 20% of the Medicare-approved amount for these covered drugs.

If the covered drugs you get in a hospital outpatient department are part of the service you get, you pay the copayment for the services.

However, if you get other types of drugs in a hospital outpatient department, what you pay depends on whether you have Part D or other prescription drug coverage, whether the drug is covered by your drug plan, and whether the hospital is in your drug plan’s network.

Contact your prescription drug plan to find out what you pay for drugs you get in a hospital outpatient department.

IMPORTANT: You must pay 100% out-of-pocket for most prescription drugs under Part B, unless you have separate Part D or other drug coverage.

Prostate screenings help detect prostate cancer. Medicare covers a digital rectal exam and Prostate Specific Antigen (PSA) test once every 12 months for all men with Medicare over age 50.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies for the doctor’s visit. You pay nothing for the PSA test.

Medicare covers medically necessary prosthetics and orthotics, including arm, leg, back, and neck braces, artificial eyes, artificial limbs, and and their replacement parts.

Medicare also covers some types of breast prostheses (after mastectomy); and prosthetic devices needed to replace an internal body part or function (including ostomy supplies, and parenteral and enteral nutrition therapy) when your doctor orders it.

For Medicare to cover your prosthetic or orthotic, you must go to a supplier that is enrolled in Medicare.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies. Includes many outpatient primary care services. You pay 20% of the amount charged, and the Part B deductible applies.

Medicare Part B covers visits with your primary care doctor.

It also includes many outpatient primary care services, as well.

Medicare and Direct Primary Care

Medicare does not cover direct primary care services, however. If you have a DPC doctor, you must pay the premiums out of your own pocket.

However, if your DPC doctor orders labs, images, or other services, these services may be covered under Medicare Part B.

You pay 20% of the amount charged, and the Part B deductible applies.

Covered in some cases for surgery that isn’t an emergency.

In some cases, Medicare covers third surgical opinions.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Includes up to 8 face-to-face visits in a 12-month period if you are diagnosed with an illness caused or complicated by tobacco use, or you take a medicine that is affected by tobacco.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Evaluation and treatment given to regain and strengthen speech and language skills including cognitive and swallowing skills when your doctor certifies your need for it.

There may be limits on these services and exceptions to these limits.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Medicare Part B covers outpatient visits for treatment of a surgical or surgically-treated wound.

You pay a fixed copayment for these services when you get them in a hospital outpatient department. You pay nothing for the supplies.

The Part B deductible applies, and you must pay a 20 percent co-insurance charge for physicians’ services, unless you have Medigap, Medicare Advantage, or the Medi-Share 65+ health sharing plan.

Includes a limited number of medical or other health services, like office visits and consultations provided using an interactive two-way telecommunications system (like real-time audio and video) by an eligible provider who is at a location different from the patient’s.

Available in some rural areas, under certain conditions, and only if the patient is located at one of the following places: a doctor’s office, hospital, rural health clinic, federally-qualified health center, hospital-based dialysis facility, skilled nursing facility, or community mental health center.

However, these services still qualify for Medicare coverage of telehealth services even outside of a rural area:

• Monthly End-Stage Renal Disease (ESRD) visits for home dialysis
• Services for diagnosis, evaluation, or treatment of symptoms of an acute stroke wherever you are, including in a mobile stroke unit
• Services to treat a substance use disorder or a co-occurring mental health disorder or for the diagnosis, evaluation, or treatment of a mental health disorder, including in your home
• Behavioral health services (also called mental health services), including in your home
• Diabetes self-management training
• Medical nutrition therapy

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Medicare covers imaging services, including X-rays, MRIs, CT scans, EKGs, and some other diagnostic tests.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Note: If you get the test at a hospital as an outpatient, you pay a specified copayment that may be more than 20% of the Medicare-approved amount, but it can’t be more than the Part A hospital stay deductible.

Medicare Part B covers doctor services for heart, lung, kidney, pancreas, intestine, and liver transplants under certain conditions and only in a Medicare-certified facility.

Medicare also covers bone marrow and cornea transplants under certain conditions.

Immunosuppressive drugs are covered under Part B if Medicare paid for the transplant, or an employer or union group health plan that was required to pay before Medicare paid for the transplant.

Eligibility

You must have been entitled to Part A at the time of the transplant, and you must be entitled to Part B at the time you get immunosuppressive drugs.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Note: If you are thinking about joining a Medicare Advantage Plan and are on a transplant waiting list or believe you need a transplant, check with the plan before you join to make sure your doctors and hospitals are in the plan’s network.

Also, check the plan’s coverage rules for prior authorization.

Note: Medicare drug plans (Part D) may also cover immunosuppressive drugs, even if Medicare or an employer or union group health plan didn’t pay for the transplant.

Medicare covers implantable cardioverter defibrillators for some people diagnosed with heart failure. If you get the surgical implant as an outpatient, you pay 20% of the Medicare-approved amount for the doctor’s services.

You’ll also pay a copayment. But your copayment will be no more than the Part A hospital stay copayment if you get the device as a hospital outpatient.

The Part B deductible will also apply ($257 as of 2025).

It does not generally cover care you receive outside these areas except in very limited circumstances:

Medicare may pay for services that you get while on board a ship within the territorial waters adjoining the land areas of the U.S.

In rare cases, Medicare may pay for inpatient hospital, doctor, or ambulance services you get in a foreign country in the following situations:

1. If an emergency arose within the U.S. and the foreign hospital is closer than the nearest U.S. hospital that can treat your medical condition;
2. If you are traveling through Canada without unreasonable delay by the most direct route between Alaska and another state when a medical emergency occurs and the Canadian hospital is closer than the nearest U.S. hospital that can treat the emergency;
3. If you live in the U.S. and the foreign hospital is closer to your home than the nearest U.S. hospital that can treat your medical condition, regardless of whether an emergency exists.

You pay 20% of the Medicare-approved amount, and the Part B deductible applies.

Medicare covers services needed to treat a sudden illness or injury that isn’t considered a medical emergency. You pay 20% of the Medicare-approved amount, and the Part B deductible applies.