Part A — what's actually covered
Part A pays for: inpatient hospital stays (private/semi-private room, meals, general nursing, drugs administered during stay, hospital services and supplies); inpatient mental health hospital stays (with a 190-day lifetime limit at psychiatric hospitals); skilled nursing facility (SNF) care for up to 100 days following a qualifying 3-day inpatient hospital stay; home health (limited, requires being homebound); and hospice care (terminal illness).
Part A does NOT cover: long-term custodial nursing home care, doctor's services during your stay (those are Part B), outpatient observation care (also Part B), or long-term care in any setting.
Part A's benefit period structure
Part A's deductible isn't annual — it's per benefit period. A benefit period starts the day you're admitted as an inpatient and ends after you've been out of the hospital and any skilled nursing facility for 60 consecutive days.
If you're admitted in February, discharged in March, and re-admitted in May (less than 60 days later), that's still the same benefit period and you don't pay the $1,676 deductible again. But if you're re-admitted in July (after a 60+ day gap), it's a new benefit period and a new deductible.
Most people will have one benefit period a year, if any. But people with chronic conditions can have multiple benefit periods — and multiple $1,676 deductibles — in a single year.
Part B — the comprehensive list
Part B covers: doctor visits (primary care + specialists), outpatient hospital services, durable medical equipment (oxygen, wheelchairs, walkers, CPAP), ambulance transport, mental health (outpatient), preventive services (annual wellness visit, flu shots, mammograms, colonoscopies), most outpatient surgeries, lab tests, X-rays and imaging, physical/occupational/speech therapy, partial hospitalization for mental health, second opinions, clinical research costs, some home health, telehealth, chiropractic (limited), and certain drugs administered in clinical settings (chemo infusions, immunosuppressants after a transplant).
Part B does NOT cover: routine dental (most), routine vision (cataract surgery is covered, glasses are not), hearing aids, custodial care, cosmetic surgery, most foot care, and prescription drugs you fill yourself at a pharmacy (that's Part D).
Part B's cost structure
Part B has an annual deductible of $257 (2026). Once you've paid that, Part B covers 80% of the Medicare-approved amount and you're responsible for 20%. There's no annual out-of-pocket maximum.
That last point is critical and underappreciated. If you have a year with major illness — say $400,000 in covered medical bills — your 20% share is $80,000. There is no cap on this. This is the single biggest reason most Original Medicare beneficiaries buy Medigap (which covers the 20%) or switch to Medicare Advantage (which has an OOP max).
The Medicare-approved amount isn't the same as what doctors might charge. Medicare sets payment rates for thousands of services. If your doctor accepts assignment (95%+ of doctors do), they accept the Medicare rate as full payment. If they don't accept assignment but are 'participating', they can charge up to 15% above the Medicare rate (the 'limiting charge').
The Two-Midnight rule and the inpatient/outpatient trap
Here's where Medicare classification can cost you tens of thousands. When you're admitted to a hospital, your status (inpatient vs. outpatient observation) is determined by the doctor's order and CMS guidance — and the same care can be classified differently depending on how it's documented.
The Two-Midnight rule: if your doctor expects you to need at least two midnights of medically necessary hospital care, you should be admitted as inpatient (Part A). If less than two midnights, observation status (Part B).
Why does this matter? Two reasons:
(1) Cost-sharing differs. Inpatient: Part A deductible ($1,676) and that's roughly your out-of-pocket. Observation: Part B coinsurance (20% of all charges, which can be substantial).
(2) SNF qualification. Medicare only pays for skilled nursing care if you had a qualifying 3-day inpatient hospital stay. Observation days don't count toward the 3-day requirement. So if you spent 4 days in the hospital but were classified as observation, you don't qualify for Medicare-covered SNF care — even though you medically needed it.
How to know your status — and challenge it
Hospitals are required to give you a 'Medicare Outpatient Observation Notice' (MOON form) within 36 hours of your status. If you're getting a MOON, you're observation. If you're not, you're presumably inpatient.
If you're being placed in observation and you think you should be inpatient, you can ask the hospital to escalate to a physician advisor for review. After discharge, you can appeal Medicare's coverage decisions through the standard Medicare appeals process — but reclassifying after the fact is hard.
The single best move: ask point-blank, 'Am I being admitted as inpatient or observation?' before settling in.
What Original Medicare looks like in practice
If you have only Original Medicare and no supplement, here's the financial picture in 2026:
$257 Part B annual deductible + 20% coinsurance forever (no cap)
$1,676 Part A deductible per benefit period
$202.90 Part B premium per month ($2,434.80/year)
$0 Part A premium for most
No prescription drug coverage (you'd need to add Part D)
No dental, vision, hearing
Total expected cost in a healthy year for a typical retiree with average drug needs and Part D: roughly $3,500-$5,000 in premiums + deductibles + drug costs. In a high-utilization year with a $400K medical episode, your share could exceed $80,000 if you don't have Medigap.
This is why nobody who is risk-averse should have Original Medicare alone. It's a starting point, not a complete solution.