Medicare · Supporting
Centers for Medicare and Medicaid Services: what it does and how it shapes your benefits
Last reviewed September 10, 20264 min readBy the Goodsurance editorial team Reviewed by the Goodsurance editorial team
The Centers for Medicare and Medicaid Services (CMS) is the federal agency inside the U.S. Department of Health and Human Services that runs Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and the Health Insurance Marketplace. Every Medicare premium you pay, every deductible you meet, and every coverage rule your plan follows traces back to a CMS regulation or annual announcement.
What CMS is and what it administers
CMS publishes updated Medicare cost figures each fall, effective January 1 of the coming year. That publishing cadence is why enrollment-season numbers are always labeled by year: the 2026 figures below reflect what CMS announced in fall 2025 and are the verified, current amounts.
How CMS sets your annual Medicare costs
CMS determines the official figures for both parts of Original Medicare each fall, along with the parameters for Part D prescription drug coverage.
Part B (medical insurance)
In 2026, the standard Part B premium is $202.90 per month. The annual Part B deductible is $283. After you meet the deductible, Medicare pays 80% of the approved amount and you pay the remaining 20%, with no annual cap on that 20% share.
Part A (hospital insurance)
Part A is premium-free for anyone with 40 or more quarters (about 10 years) of Medicare-taxed work. If you do not qualify on your own record, you may buy into Part A: in 2026, the buy-in premium is $311 per month with 30 to 39 quarters of coverage and $565 per month with fewer than 30 quarters.
The Part A inpatient deductible is $1,736 per benefit period in 2026, not per year. A second hospitalization in the same calendar year can trigger a second deductible. If a hospital stay extends past 60 days, CMS sets coinsurance at $434 per day for days 61 to 90. Lifetime reserve days, of which there are 60 available over a lifetime, cost $868 per day.
Part D (prescription drug coverage)
In 2026, no Part D plan may set a deductible above $615. Out-of-pocket spending on covered Part D drugs is capped at $2,100 for the year; once you reach that cap, covered formulary drugs cost nothing for the rest of the year. The coverage gap commonly called the donut hole no longer exists under the Inflation Reduction Act.
CMS also applies income-related adjustments called IRMAA (Income-Related Monthly Adjustment Amount) to both Part B and Part D. In 2026, IRMAA begins above $109,000 in annual income for single filers and $218,000 for joint filers, using income reported two years prior. Higher earners pay more through additional tiers above those thresholds.
Part A hospital stay costs by day
Once your 60 lifetime reserve days are used, Medicare pays nothing for the stay.
How CMS regulates Medicare Advantage and Part D plans
Medicare Advantage (Part C) and Part D plans are offered by private insurers, but every plan must be approved by CMS and must follow CMS rules to participate in Medicare. CMS sets the caps that protect your wallet when a plan's cost-sharing would otherwise run high.
For 2026, CMS set the federal in-network maximum out-of-pocket (MOOP) cap for Medicare Advantage at $9,250. The combined in-network and out-of-network cap is $13,900. Plans may set their limits below the federal cap, and according to KFF, the 2026 enrollment-weighted average in-network MOOP is $5,421.
CMS also enforces prior-authorization timelines under the final rule CMS-0057-F, which took full effect January 1, 2026. Medicare Advantage plans must issue standard prior-authorization decisions within 7 calendar days. Expedited decisions for urgent situations must arrive within 72 hours, and denials must include a specific reason.
CMS assigns Star Ratings on a 1-to-5 scale to Medicare Advantage and Part D plans based on quality and performance measures. You can compare ratings at medicare.gov.
How CMS protects beneficiaries through rules and penalties
Several CMS rules protect both the financial integrity of Medicare and your rights as a beneficiary.
Late-enrollment penalties. The Part B penalty adds 10% to your premium for each full 12-month period you delayed enrollment without qualifying coverage, and it is permanent. For Part D, going 63 or more days without creditable prescription drug coverage after your initial enrollment period triggers a penalty of 1% of the national base beneficiary premium for each full month uncovered, also permanent and added to your monthly premium.
Excess charge protection. Non-participating providers may charge up to 15% above the Medicare-approved amount. Some states ban excess charges entirely.
Skilled nursing facility rules. CMS requires a 3-day formal inpatient hospital admission before Medicare will cover care in a skilled nursing facility (SNF). Observation status, which hospitals bill under Part B, does not count toward those 3 days. In 2026, SNF coinsurance is $217 per day for days 21 to 100; days 1 to 20 are fully covered, and after day 100 Medicare pays nothing.
Medigap standardization. CMS standardizes Medigap (Medicare Supplement) plan designs by letter, so the coverage inside a given letter plan is identical regardless of which insurer sells it. The guaranteed-issue Medigap window is 6 months, starting the month you are both 65 and enrolled in Part B.
Skilled nursing facility costs by day
A 3-day formal inpatient hospital stay is required before Medicare covers any SNF care.
Using CMS resources to research your options
The primary consumer portal for CMS is medicare.gov, where you can compare plans and hospitals, review your claims history, look up drug costs under specific Part D plans, and read plain-language guides for each part of Medicare. For official rate announcements, final rules, and fact sheets, cms.gov is the authoritative source.
If you have questions about your specific plan benefits or want help comparing options for your situation, please contact us to discuss plan options.
Common questions about IRMAA appeals
Quick answers, fast .
Tap any question to expand. Each links to a fuller standalone answer.
Does Medicare pay for hearing aids
Original Medicare does not cover hearing aids or fittings.
Some Medicare Advantage plans may include a hearing benefit, but what they cover varies by plan.
Does Medicare cover ambulance services?
Yes, in limited situations.
Medicare Part B covers emergency ambulance transportation when traveling any other way could endanger your health, taking you to the nearest appropriate hospital or facility. You pay 20% of the Medicare-approved amount after the $283 Part B deductible in 2026. Air ambulance is covered only when ground transport cannot reach you or would take too long. Non-emergency ambulance trips, for example to dialysis, are covered only when a doctor provides a written order stating they are medically necessary. Medicare does not cover ambulance rides taken purely for convenience.
Does Medicare cover skilled nursing facility care?
Yes, on a short-term basis.
Medicare Part A covers skilled nursing facility (SNF) care after a qualifying inpatient hospital stay of at least 3 days, when you need daily skilled care like nursing or therapy. In 2026 you pay $0 for days 1 through 20 of each benefit period, $217 per day for days 21 through 100, and all costs after day 100. Coverage is for skilled care while you recover, not for long-term or custodial care (help with daily activities like bathing or dressing), which Medicare does not cover. Long-term nursing home care is generally paid through Medicaid or private funds.
Does Medicare cover physical therapy?
Yes.
Medicare Part B covers outpatient physical therapy that is medically necessary to treat your condition. You pay 20% of the Medicare-approved amount after the yearly Part B deductible ($283 in 2026). There is no longer a hard dollar cap on therapy, but once your physical and speech therapy together pass $2,480 in 2026, your therapist must add a note (called a KX modifier) confirming you still need care. Claims above $3,000 may be reviewed for medical necessity. Part A covers physical therapy you receive as a hospital inpatient or in a skilled nursing facility. A doctor or therapist must set up and regularly review your plan of care.
Does Medicare cover mental health services?
Yes.
Medicare covers mental health care across its parts in 2026. Part B covers outpatient services like therapy, counseling, and visits with psychiatrists, psychologists, and clinical social workers, and since 2024 it also covers marriage and family therapists and mental health counselors. You pay 20% of the Medicare-approved amount after the $283 deductible, and one depression screening each year is free. Part A covers inpatient mental health care, with a lifetime limit of 190 days in a freestanding psychiatric hospital. Part D covers most mental health medications. Many of these services are also available by telehealth, and Medicare Advantage plans cover at least the same benefits.
Does Medicare cover chiropractic care?
Partly.
Medicare Part B covers one specific chiropractic service: manual manipulation of the spine to correct a subluxation (when one or more bones of the spine are out of position) that a doctor confirms is medically necessary. You pay 20% of the Medicare-approved amount after the $283 Part B deductible in 2026. Medicare does not cover other services a chiropractor might offer, such as X-rays, massage therapy, acupuncture, or routine wellness visits, so you would pay the full cost for those. Some Medicare Advantage plans include extra chiropractic or wellness benefits beyond this.
Does Medicare cover home health care?
Yes, when you qualify.
Medicare Parts A and B cover home health care if a doctor certifies that you are homebound (leaving home takes a major effort) and need part-time skilled care, such as skilled nursing, physical therapy, occupational therapy, or speech therapy. A Medicare-certified home health agency must provide the care under a plan your doctor reviews. You pay $0 for covered home health visits in 2026, and 20% for any durable medical equipment. Medicare does not cover 24-hour home care, meal delivery, or homemaker services like cleaning when that is the only care you need.
Does Medicare cover vision care?
Mostly no for routine care.
In 2026, Original Medicare does not cover routine eye exams for glasses or contact lenses, and it does not pay for the glasses or contacts themselves. It does cover some medical eye care: yearly glaucoma screenings for people at high risk, diabetic retinopathy exams, treatment for eye diseases, and cataract surgery (including one pair of standard glasses or contacts afterward). For those covered services you pay 20% after the $283 Part B deductible. Many Medicare Advantage plans add a routine vision benefit covering eye exams and an allowance for glasses.
Does Medicare cover hearing aids?
Original Medicare does not cover hearing aids or the exams used to fit them.
Some Medicare Advantage plans include a hearing benefit, but coverage varies by plan.
Does Medicare cover diabetes supplies and testing?
Yes.
In 2026 Medicare covers most diabetes care across two parts. Part B (outpatient care and equipment) covers blood sugar monitors, test strips, lancets, and continuous glucose monitors (CGMs) as durable medical equipment, plus diabetes screenings and a self-management training program. You pay 20% of the Medicare-approved amount after the $283 Part B deductible. Part D (drug coverage) covers insulin and related supplies like syringes, and in 2026 your insulin is capped at $35 for a month's supply. If you have a Medicare Advantage plan, it covers at least the same diabetes benefits, sometimes with added extras.
Does Medicare cover durable medical equipment?
Yes.
Medicare Part B covers durable medical equipment (DME): reusable medical gear your doctor prescribes for use at home, such as wheelchairs, walkers, hospital beds, oxygen equipment, CPAP machines, and blood sugar monitors. You pay 20% of the Medicare-approved amount after the $283 Part B deductible in 2026, and Medicare pays the other 80%. To be covered, the item must be ordered by a Medicare-enrolled doctor and supplied by a Medicare-enrolled supplier, and some items are rented rather than bought. Equipment meant mainly for use outside the home, or only for comfort or convenience, is not covered.
Which is better, Medigap or Medicare Advantage?
Neither is better for everyone; they suit different needs.
Medigap (also called Medicare Supplement, a private policy that pairs with Original Medicare) lets you see any doctor nationwide who accepts Medicare with no network and very predictable out-of-pocket costs, but you pay a monthly Medigap premium and add a separate Part D drug plan. Medicare Advantage (Part C, your Medicare benefits through a private plan) often has a lower or $0 plan premium, bundles drug coverage and extras like dental and vision, and caps your yearly out-of-pocket costs, but uses provider networks and may require prior approval. People who travel, want maximum doctor freedom, and prefer steady costs often lean Medigap; people who want low premiums, extras, and a network they are comfortable with often lean Medicare Advantage. With both, you still pay the Part B premium ($202.90 per month in 2026). To find out which fits your situation, reach out to a licensed Goodsurance advisor at 1-888-301-8091 (TTY 711), Mon to Fri 8 am to 5 pm PT.
References
- 2026 Medicare Parts A and B premiums and deductiblesOfficial CMS fact sheet with verified 2026 figures for Part A and Part B premiums, deductibles, coinsurance, and buy-in premiums.
- 2026 Medicare Part D bid information and premium stabilization demonstration parametersCMS source for the 2026 Part D deductible cap, base beneficiary premium, and out-of-pocket cap.
- Medicare Advantage in 2026: premiums, out-of-pocket limits, supplemental benefits, and prior authorizationKFF analysis of 2026 Medicare Advantage MOOP limits, enrollment-weighted averages, and CMS-0057-F prior-authorization rule changes.
- Get started with MedicareCMS consumer guide covering enrollment windows, late-enrollment penalties, Medigap rules, and the SNF qualifying-stay requirement.