Medicare has three main costs: the monthly premium you pay, the yearly deductible you pay before coverage starts, and the copayments or coinsurance you pay when you use care

Most people turning 65 pay a Part A premium of $0 per month if they or their spouse paid Medicare taxes for at least 10 years while working. If you do not meet that requirement, the premium ranges from about $278 to $557 per month in 2024, depending on how many years you paid in. You pay this whether you use the hospital or not.

Part B (doctor visits and outpatient care) costs most people $164.90 per month in 2024, though the amount rises each year. If your income is higher than a certain threshold — $97,000 for a single person or $194,000 for a married couple filing jointly in 2023 — you pay more. These higher amounts are called Income-Related Monthly Adjustment Amounts, or IRMAA, and can range from $20 to $560 extra per month depending on your income level.

These premiums are just the start. You also pay a yearly Part A deductible of $1,632 in 2024 before Medicare starts paying for hospital stays. Part B has a yearly deductible of $240. After you meet the deductible, you typically pay 20% of the cost for doctor visits and outpatient services, and a copay (a fixed dollar amount) for each hospital day after the first 60 days.

If you add Part D prescription drug coverage, that is another premium — usually $7 to $100+ per month depending on the plan you choose. You also pay a deductible for drugs (typically $505 in 2024) and then copayments for each prescription.

Key Takeaways

  • Part A (hospital) is free for most people at 65 if they paid Medicare taxes for 10 years; Part B (doctor) costs around $165 per month in 2024 and rises yearly.
  • You pay a yearly deductible before Medicare coverage begins — $1,632 for Part A and $240 for Part B in 2024 — plus copayments or coinsurance when you receive care.
  • If your income exceeds $97,000 (single) or $194,000 (married), you pay extra monthly charges called IRMAA on top of your regular Part B premium.
  • Part D prescription drug coverage adds another monthly premium and yearly deductible, with copayments for each medication you fill.
  • Costs change yearly, and the amounts you pay depend on your income, which plan you choose, and how much medical care you actually use.

How Part A and Part B premiums work

Part A covers hospital stays, skilled nursing facility care, hospice, and some home health services. Most people who worked and paid Medicare taxes for at least 10 years pay $0 per month for Part A. If you worked fewer than 10 years, you can still buy Part A coverage, but the premium depends on how many years you did work. Someone with 30 to 39 quarters of work history pays about $278 per month; someone with fewer than 30 quarters pays about $557 per month.

Part B covers doctor office visits, outpatient surgery, diagnostic tests, and some preventive care. The standard Part B premium in 2024 is $164.90 per month. This amount is set by Medicare and changes each January. You pay Part B premiums whether you go to the doctor or not, and they are usually taken directly from your Social Security check if you are receiving benefits.

If you delay signing up for Part B after you turn 65 and you do not have other may have access to coverage, you may face a late enrollment penalty. This penalty adds 10% to your Part B premium for each year you delayed, and it stays with you for life. The same penalty applies to Part D if you go without drug coverage.

Income-related charges (IRMAA) and when they explore

If your income is above certain thresholds, Medicare charges you more for Part B and Part D. These extra charges are based on your Modified Adjusted Gross Income (MAGI) from two years prior. In 2024, if your MAGI was above $97,000 (single) or $194,000 (married filing jointly) in 2022, you pay extra.

The extra charges increase in brackets. For example, a single person with 2022 MAGI between $97,001 and $123,000 pays an extra $70 per month on top of the standard Part B premium. Someone with MAGI between $411,001 and $500,000 pays an extra $560 per month. These amounts change yearly and are based on income thresholds that also change yearly.

You can request a review if your income dropped significantly in the current year — for example, if you retired, lost a spouse, or had a major life change. Medicare may lower your IRMAA charges if your current income is genuinely lower than the prior-year figure they used to calculate it.

Deductibles and what you pay after meeting them

A deductible is the amount you pay out of your own pocket before Medicare starts to pay. Part A has a yearly deductible of $1,632 in 2024. This covers all hospital stays in a benefit period (a benefit period starts when you enter the hospital and ends 60 days after you leave). If you are hospitalized twice in the same year but more than 60 days apart, you pay the deductible twice.

Part B has a yearly deductible of $240 in 2024. Once you meet this deductible, you typically pay 20% of the Medicare-approved amount for doctor visits, outpatient surgery, and diagnostic tests. For hospital stays beyond the first 60 days, you pay a copay per day: $408 per day for days 61 through 90, and $816 per day for days 91 and beyond (up to 60 additional days).

These deductible amounts increase most years. Medicare announces the new amounts in October for the following year. If you have a Medigap or Medicare Advantage plan, your out-of-pocket costs may be lower because these plans help cover what Original Medicare does not pay.

Part D prescription drug costs

Part D is optional coverage for prescription medications. The monthly premium varies widely depending on which plan you choose — some plans cost $7 per month, while others cost $100 or more. You choose a Part D plan during your initial enrollment period or during the annual open enrollment period in October through December.

Each Part D plan has its own yearly deductible (up to $505 in 2024), copayments for generic drugs, and copayments for brand-name drugs. After you and your plan spend a combined total of $5,030 on covered drugs in 2024, you enter the "coverage gap" or "donut hole," where you pay a higher percentage of drug costs. Once you reach $8,000 in out-of-pocket costs, catastrophic coverage kicks in and you pay only a small copay for the rest of the year.

If your income is low, you may be able to get help paying Part D premiums and copayments through a program called Extra Help (also called the Low-Income Subsidy). You can learn whether you may be may be able to access by contacting Social Security or your local Medicaid office.

Medigap and Medicare Advantage: different ways to lower your costs

Original Medicare (Part A and Part B) leaves you responsible for deductibles, copayments, and coinsurance. Two main options can lower these out-of-pocket costs: Medigap and Medicare Advantage.

Medigap is supplemental insurance sold by private companies that pays some or all of the costs Medicare does not cover. You keep your Original Medicare coverage and add Medigap on top. Medigap plans are labeled A through N, and each plan covers different amounts. For example, Plan G covers the Part B deductible and 20% coinsurance, while Plan N covers most costs but leaves you responsible for some copayments. Medigap premiums vary by plan, age, and location, but typically range from $100 to $300+ per month.

Medicare Advantage (Part C) is an alternative to Original Medicare offered by private insurance companies. You get your Part A and Part B coverage through the Medicare Advantage plan instead of through Original Medicare. Many Medicare Advantage plans have $0 premiums (beyond your Part B premium), but they usually have lower deductibles and copayments than Original Medicare. The trade-off is that you must use doctors and hospitals in the plan's network, and you may need prior approval for certain services.

What changes year to year and how to stay informed

Medicare costs change every January. The Part B premium, Part A deductible, Part B deductible, and hospital copayments all adjust based on inflation and healthcare costs. Part D premiums and deductibles also change yearly, and the income thresholds for IRMAA charges change as well.

Medicare sends an official notice called the Annual Notice of Change to everyone with Medicare Advantage or Part D coverage in September or October each year. This notice tells you what your costs will be in the coming year. If you have Original Medicare only, you will not receive this notice, but you can find the new costs on Medicare.gov or by calling 1-800-MEDICARE.

Open enrollment for Medicare Advantage and Part D runs from October 15 through December 7 each year. This is when you can switch plans, drop coverage, or sign up for the first time if you missed your initial enrollment window. If you do not act during open enrollment, you are locked into your current plan for the rest of the year.

Frequently Asked Questions

Do I have to pay for Part A if I never worked?

If you did not work or paid Medicare taxes for fewer than 10 years, you can still buy Part A coverage starting at age 65, but you will pay a premium. The amount depends on how many years you worked. You can also be covered through a spouse's work history if you were married for at least one year.

What happens if I cannot afford my Medicare premiums?

If your income is low, you may be able to get help through Medicaid, which can pay your Part B and Part D premiums. Contact your state Medicaid office or call 1-800-MEDICARE to learn about programs in your state. Some nonprofits also offer information with Medicare costs.

Can I change my Medicare plan if my costs go up?

You can change Medicare Advantage or Part D plans during the annual open enrollment period (October 15 through December 7). If you have Original Medicare and want to switch to Medicare Advantage or add Medigap, you have more limited windows, especially if you are past your initial enrollment period. Contact Medicare to learn your options.

Why am I paying IRMAA if my income dropped this year?

IRMAA is based on your income from two years ago, not your current income. If your income dropped significantly due to retirement, job loss, or a major life event, you can request a review. Medicare may adjust your charges if your current income is substantially lower than the prior-year figure they used.

Do I pay the same copay at every doctor's office?

No. With Original Medicare, you pay 20% of the Medicare-approved amount after you meet your deductible. The actual dollar amount varies depending on the service and the doctor's location. With Medicare Advantage, copayments are usually fixed amounts set by your plan, so you know in advance what you will pay.