Medicare and Hospital Bills Have a Complicated Relationship—Here’s What You’ll Owe

Key Takeaways

• Medicare covers many hospital-related expenses, but you are still responsible for deductibles, coinsurance, and other potential out-of-pocket costs depending on your length of stay and type of care.

• Your hospital bill under Medicare may include charges that are not always obvious, such as observation status, doctor services, or non-covered items, so understanding the details is essential.

Understanding Medicare’s Role in Hospital Coverage

Medicare has different parts that work together to cover your hospital costs, but what you actually owe depends on several factors. Knowing how these parts interact is key to managing your financial responsibilities.

Medicare Part A and Hospitalization

Medicare Part A is the portion that covers inpatient hospital care. When you’re formally admitted into a hospital, Part A usually steps in. Here’s what it generally covers:

• Semi-private room

• Meals

• General nursing

• Medications during your stay

• Hospital services and supplies

What you owe:

• A deductible for each benefit period (in 2025, this is $1,676)

• Coinsurance after a certain number of days:

  • Days 1–60: No coinsurance

  • Days 61–90: $419 per day

  • Days 91–120: $838 per day (using lifetime reserve days)

  • Beyond 120 days: You pay all costs unless you have other coverage

A “benefit period” starts the day you’re admitted and ends when you haven’t received inpatient care for 60 consecutive days. You can have multiple benefit periods in a year.

Skilled Nursing Facility (SNF) Care Under Part A

If you require rehabilitation or skilled care after a hospital stay, Part A also covers care in a Medicare-certified skilled nursing facility.

Coverage requirements:

• Must have a prior inpatient hospital stay of at least 3 consecutive days

• Admission to the SNF must happen within 30 days of hospital discharge

What you owe:

• Days 1–20: $0 coinsurance

• Days 21–100: $209.50 per day

• After day 100: You pay all costs

SNF coverage is not for long-term custodial care—it only covers services like physical therapy, wound care, or IV medications.

What Happens With Observation Status

Being in the hospital doesn’t always mean you’re an inpatient. If you’re under observation status, Medicare Part B—not Part A—covers the costs, and this can dramatically affect your out-of-pocket spending.

Observation services may include diagnostic tests, short-term treatment, or monitoring to decide if you should be admitted.

What you owe under Part B:

• 20% coinsurance for doctor and outpatient services after meeting the annual Part B deductible ($257 in 2025)

• Any charges for medications administered during observation, which may not be fully covered

Observation stays don’t count toward the 3-day inpatient requirement for SNF care. This means you could be ineligible for covered nursing facility care even after spending days in the hospital.

How Part B Affects Doctor Services in the Hospital

Even during an inpatient stay, physician services are billed separately under Medicare Part B. These include:

• Surgeons

• Anesthesiologists

• Radiologists

• Pathologists

These specialists bill independently from the hospital. After the Part B deductible, you pay 20% of the approved amount for each of these services.

Emergency Room Visits and Hospital Admission

When you go to the emergency room, your cost depends on whether you’re admitted. If you’re not admitted and instead treated as an outpatient or under observation:

• Part B applies

• You pay a copayment for the ER visit and 20% of the doctor’s charges

• You may also be billed for diagnostic tests or medical supplies

If you are formally admitted, charges shift to Part A, and the Part A deductible covers the ER and all inpatient costs.

Outpatient Hospital Services

Even if you’re never admitted, hospitals may perform procedures or tests as an outpatient. Examples include colonoscopies, X-rays, or minor surgeries.

What you owe:

• Part B deductible ($257 in 2025)

• 20% coinsurance for services

• Possible copayments for each outpatient service

These charges can add up quickly if multiple procedures are performed on the same day. Hospitals may also charge a separate facility fee.

Items Medicare Doesn’t Cover in the Hospital

Medicare doesn’t cover everything, and knowing what’s excluded can help avoid surprises on your bill.

Non-covered items may include:

• Private-duty nursing

• Personal care items (toiletries, razors, socks)

• Television or phone charges

• Private room (unless medically necessary)

You are responsible for 100% of the cost of these non-covered services.

How Medicare Advantage Plans Can Change the Picture

While this article focuses on Original Medicare, you might be enrolled in a Medicare Advantage Plan, also known as Medicare Part C. These plans must cover everything Original Medicare covers but often structure costs differently.

What might change:

• Copayment amounts

• Daily hospital costs

• Network requirements

• Prior authorization rules

You must check your plan’s details to understand your specific financial obligations.

Additional Hospital-Related Services

Here are other services related to a hospital stay and how Medicare treats them:

Home Health Care

If your doctor orders home health care after a hospital stay:

• Medicare may cover 100% of approved services

• You must be homebound and need part-time skilled care

Hospice Care

If you’re terminally ill and forgo curative treatment:

• Part A covers hospice care

• You may owe small copayments for medications or respite care

Hospice care can take place at home, in a facility, or in a hospice center.

Durable Medical Equipment (DME)

Items like walkers, oxygen tanks, or hospital beds for home use are covered under Part B.

You owe:

• 20% of the Medicare-approved amount after meeting your deductible

• Only from Medicare-approved suppliers

How to Prepare for Your Share of the Costs

To avoid surprises, keep the following steps in mind:

• Confirm your hospital admission status

• Ask for an “Advance Beneficiary Notice” (ABN) for services that may not be covered

• Review your Medicare Summary Notice (MSN) regularly

• Understand each part of Medicare and how it applies to your hospital experience

It’s also helpful to talk to a professional who can walk you through your costs before you receive care.

Hospital Costs Under Medicare Aren’t Always Straightforward

The reality is that Medicare doesn’t eliminate hospital bills—it simply helps manage them. From deductibles and coinsurance to unexpected charges for non-covered services, the amount you owe can vary based on the nature of your hospital stay and what kind of care you receive.

Don’t let unexpected costs catch you off guard. Speak to a licensed agent listed on this website to get expert guidance on your Medicare hospital coverage and financial responsibilities.