Medicare has costs at every stage, and they vary by which parts you choose
Medicare is not free. You pay premiums (monthly fees), deductibles (amounts you pay before coverage starts), and copayments or coinsurance (your share of each service). The total cost depends on which parts of Medicare you sign up for, your income, and whether you get help paying.
Most people pay a premium for Part B (doctor visits and outpatient care) and Part D (prescription drugs). Part A (hospital care) is usually free if you or your spouse paid Medicare taxes for at least 10 years while working. Part C (Medicare Advantage) replaces Parts A and B with a private plan, and costs vary by insurer and location. Costs change every year, so the amounts below are examples — check Medicare.gov or your plan documents for current figures.
Key Takeaways
- Part A (hospital) is usually free, but Part B (doctor visits) costs a monthly premium that increases if you delay signing up.
- You pay a deductible before Medicare covers most services, and then you pay a percentage of the cost (coinsurance) or a flat fee (copayment) for each visit or prescription.
- Part D (prescription drugs) has its own premium and deductible, and costs vary widely by plan and pharmacy.
- If your income is below certain thresholds, you may receive help paying premiums and deductibles through Medicaid or other programs.
- Costs increase every January, so your 2024 premium will not be the same as your 2025 premium.
Part A costs: Hospital care and skilled nursing
Part A covers hospital stays, skilled nursing facility care, hospice, and some home health services. Most people do not pay a monthly premium for Part A because they or their spouse paid Medicare taxes for at least 10 years while working. If you do not meet that requirement, you can buy Part A, but the premium is high — currently around $280 to $560 per month depending on how many years of work history you have.
Even with free Part A, you pay when you use it. In 2024, the Part A deductible for a hospital stay is $1,632 per benefit period. A benefit period starts when you enter the hospital and ends 60 days after you leave without returning. If you go back to the hospital within 60 days, you do not pay a second deductible — you are still in the same benefit period. After you pay the deductible, Medicare covers all hospital costs for the first 60 days. Days 61 through 90 cost you $408 per day. Beyond 90 days, costs rise sharply.
Skilled nursing facility care (not regular nursing home care) has its own cost structure. Medicare covers the first 20 days fully after a hospital stay of at least 3 days. Days 21 through 100 cost you $204 per day in 2024. After 100 days, you pay all costs.
Part B costs: Doctor visits, tests, and outpatient care
Part B covers doctor visits, lab tests, X-rays, ambulance services, durable medical equipment, and outpatient surgery. Almost everyone pays a monthly premium for Part B. In 2024, the standard premium is $164.90 per month, but it is higher if your income exceeds certain thresholds. The income brackets change yearly, and higher earners can pay $560 or more per month.
You also pay a Part B deductible before coverage begins. In 2024, that deductible is $240 per year. Once you meet the deductible, you typically pay 20% of the cost of most services, and Medicare pays 80%. For example, if a doctor visit costs $100, you pay $20 after your deductible is met. Some services like preventive care (annual wellness visits, cancer screenings, vaccines) have no copayment or coinsurance — Medicare covers them fully.
If you delay signing up for Part B when you first become may be able to access at 65, your premium increases by 10% for each year you wait. That penalty is permanent — it stays with you for life. The only exception is if you have health insurance through an employer and you are still working; in that case, you can delay without penalty.
Part D costs: Prescription drugs
Part D is optional coverage for prescription drugs. You choose a plan from private insurers, and each plan has its own premium, deductible, and list of covered drugs (called a formulary). Premiums range from roughly $7 to $100+ per month depending on the plan and your location. The deductible can be $0 to $505 in 2024, though many plans have no deductible.
Once you meet the deductible, you pay a copayment or coinsurance for each prescription. Generic drugs typically cost less than brand-name drugs. After you and your plan spend a certain amount on drugs (the "coverage gap" threshold, $4,850 in 2024), you enter the "donut hole" — a gap where you pay a higher percentage of drug costs. Once your out-of-pocket spending reaches a cap (around $7,050 in 2024), catastrophic coverage kicks in and you pay only a small copayment for the rest of the year.
If you delay signing up for Part D when first may be able to access, you pay a penalty of about 1% of the national average premium for each month you wait. Like the Part B penalty, this is permanent. You can avoid the penalty if you have other drug coverage (through an employer or retiree plan) that is at least as good as Medicare's.
Part C costs: Medicare Advantage plans
Part C (Medicare Advantage) is an alternative to Original Medicare (Parts A and B). Private insurers offer these plans, and they must cover everything Part A and B cover, but they do it through their own networks and rules. Some Part C plans have $0 monthly premiums, though you still pay the Part B premium to Medicare. Other plans charge an additional premium on top of Part B.
Part C plans have their own deductibles, copayments, and coinsurance, which vary by plan and insurer. Many plans include Part D (drug coverage) built in. Out-of-pocket maximums are capped by law — in 2024, the maximum is $8,300 for in-network care. Once you hit that cap, the plan covers 100% of in-network services for the rest of the year. However, if you use out-of-network providers, costs can be much higher or not covered at all, depending on the plan.
Part C plans often include extra benefits that Original Medicare does not, such as dental, vision, or fitness programs. These extras can make a $0-premium plan attractive, but read the fine print: the plan's copayments and network restrictions may cost you more than Original Medicare in the long run, especially if you see specialists or travel frequently.
Income-based help paying premiums and deductibles
If your income is low, you may receive help through Medicaid or the Medicare Savings Program (MSP). These programs pay some or all of your Part B and Part D premiums, and may cover deductibles and copayments. Income limits vary by state and change yearly. In 2024, for example, single individuals with income below roughly $1,550 per month may be may be able to access, though some states set higher limits.
To learn about you may have access to, contact your state Medicaid office or call 1-800-MEDICARE. You can also use the Medicare.gov tool to check your state's income thresholds. Medicaid also covers services that Medicare does not, such as long-term nursing home care and personal care information, which can save you thousands of dollars per year.
How costs change year to year
Medicare premiums, deductibles, and copayments increase almost every year. The Part B premium and deductible are adjusted based on inflation and the cost of medical services. Part D premiums and deductibles are set by each plan and can change significantly from year to year. Part C plans can also change their premiums, deductibles, and copayments annually.
You receive a notice in October each year showing your 2025 costs and any changes to your plan. If your plan's costs increase too much or the plan no longer meets your needs, you can switch to a different plan during the Annual Enrollment Period (October 15 to December 7). If you do not switch, you stay in your current plan and pay the new costs.
Frequently Asked Questions
Do I have to pay for Part A if I worked long enough?
If you or your spouse paid Medicare taxes for at least 10 years while working, you do not pay a Part A premium. You still pay the deductible and copayments when you use hospital or skilled nursing services. If you have fewer than 10 years of work history, you can buy Part A, but the monthly premium is high.
What happens if I cannot afford my Medicare costs?
Contact your state Medicaid office or call 1-800-MEDICARE to learn about programs that help pay premiums and deductibles. You may also be may be able to access for prescription drug information programs run by drug manufacturers. Some nonprofits offer grants to help with Medicare costs, though these are limited and competitive.
Can I switch plans if my costs go up?
Yes, during the Annual Enrollment Period (October 15 to December 7 each year), you can switch to a different Part D plan or Part C plan. You can also switch from Part C back to Original Medicare. Changes take effect January 1 of the following year.
Do preventive services cost anything?
Medicare covers many preventive services with no copayment or deductible, including annual wellness visits, cancer screenings, vaccines, and blood pressure checks. However, if your doctor finds a problem during a preventive visit and treats it, that treatment may have a copayment or coinsurance.
What if I use out-of-network doctors with Part C?
Part C plans have networks, and using out-of-network providers usually costs more or may not be covered at all. Some plans offer limited out-of-network coverage for emergencies. Check your plan's network before scheduling appointments, especially with specialists.