Common Misconceptions About Medicare Coverage That Can Lead to Surprise Costs

This is one of the most common surprises for newly enrolled beneficiaries. Original Medicare was designed around hospital and physician services, not routine sensory or oral care. A dental implant, a new pair of glasses, or a hearing aid can each cost hundreds or thousands of dollars out of pocket.

Some Medicare Advantage (Part C) plans do include limited dental, vision, or hearing benefits, but the scope and annual limits vary widely from plan to plan. Reading the plan's Evidence of Coverage document carefully before enrolling is the only reliable way to understand what is actually included.

Medicare Part A can cover a stay in a skilled nursing facility after a qualifying hospital admission of at least three days, but this benefit has strict time limits and cost-sharing requirements. Coverage applies only to skilled care (such as physical therapy or wound care), not help with daily activities like bathing or dressing.

Custodial care, which is the day-to-day assistance that most long-term nursing home residents need, is not a Medicare benefit. Medicaid may cover this cost for those who meet income and asset requirements. For a closer look at how Medicaid approaches long-term care, see what Medicaid covers for long-term care and who qualifies.

Medicare defines the United States as the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa. Care received outside these areas is almost never covered. The limited exceptions involve specific emergency scenarios in Canada or Mexico where a U.S. hospital is not reasonably accessible.

Travelers and retirees who spend extended time abroad often look at travel health insurance or international health policies to fill this gap. Some Medigap plans include a foreign travel emergency benefit with a lifetime limit, so this is worth checking if international travel is part of your plans. See what to look for when evaluating a Medigap plan for guidance on how these supplemental policies are structured.

Medicare taxes paid during employment generally apply to Part A eligibility. Part B, which covers outpatient services and physician visits, requires a monthly premium for nearly all enrollees. The standard premium amount is set annually by the Centers for Medicare and Medicaid Services (CMS) and can be higher for those with larger incomes under the Income-Related Monthly Adjustment Amount (IRMAA) rules.

Failing to account for Part B premiums, along with potential Part D (drug coverage) premiums, can affect retirement budgets in ways that feel unexpected. The article financial moves to reconsider before retirement discusses how underestimating healthcare costs is a common retirement planning gap.

There is no cap on what a beneficiary might spend under Original Medicare Parts A and B in a given year. Each hospital stay has a deductible, and Part B generally requires 20% coinsurance after the annual deductible, with no ceiling on that 20%.

Medigap policies and Medicare Advantage plans exist partly to address this. Each option has trade-offs in terms of premium cost, network restrictions, and benefits, so comparing them carefully matters. For a fuller picture of how enrollment decisions can leave gaps, health insurance enrollment mistakes that leave gaps in coverage covers the missteps that frequently leave people underinsured.