Medicare costs vary by which parts you choose and your income level

Medicare has four parts, and each one costs money differently. Part A (hospital insurance) is usually free if you or your spouse paid Medicare taxes while working. Part B (doctor visits and outpatient care) costs most people a monthly premium that changes each year — in 2024 it starts at $174.70 per month for those with standard income, but rises if you earn more. Part D (prescription drugs) and Part C (Medicare Advantage, an alternative to Parts A and B) have their own monthly costs that depend on which plan you pick.

Beyond the monthly premium, you also pay when you use care. Part A has a deductible you pay once per hospital stay. Part B has a yearly deductible, then you pay 20 percent of most services after that. Part D has a deductible, a coverage gap where you pay more, and a yearly out-of-pocket limit. Part C plans bundle these costs differently — some have low or zero premiums but higher costs when you see a doctor.

If your income is higher, your Part B and Part D premiums go up. The income thresholds and surcharge amounts change yearly. You can also reduce costs by choosing Original Medicare with a Medigap supplemental plan, or by picking a Medicare Advantage plan with lower premiums — but each path has different out-of-pocket limits and network rules.

Key Takeaways

  • Part A is usually free; Part B premiums start at $174.70 per month in 2024 but increase if your income is above certain thresholds.
  • You pay deductibles and coinsurance on top of premiums — Part A has a per-stay deductible, Part B has a yearly deductible plus 20 percent coinsurance.
  • Part D (prescription drug) premiums vary by plan and income, and you also pay out-of-pocket costs that change as you use more drugs.
  • Medicare Advantage plans (Part C) often have lower or zero premiums but may have higher costs when you visit doctors or use specialists.
  • Your total monthly cost depends on which parts you choose, which plan you pick within each part, and whether your income triggers higher premiums.

Part A and Part B premiums and deductibles

Part A hospital insurance is free for most people who are 65 or older and have worked at least 10 years in jobs where you paid Medicare taxes. If you did not work that long, you can buy Part A, but the premium is higher — it varies by how many quarters of work credits you have. Part A has no monthly premium for those who may have access to, but you pay a deductible when you go to the hospital. In 2024, that deductible is $1,632 per hospital stay.

Part B covers doctor visits, lab tests, imaging, and outpatient hospital services. The standard monthly premium in 2024 is $174.70, but this amount increases each year. If you have higher income — more than $97,000 as a single person or $194,000 as a married couple filing jointly in 2023 — you pay a surcharge on top of the base premium. The surcharge can add $70 to $350 per month depending on your exact income. Part B also has a yearly deductible of $240 in 2024, and after you meet it, you pay 20 percent of the cost of most services.

You enroll in Part B when you turn 65. If you delay enrollment and do not have other health coverage, you pay a permanent penalty of 10 percent more per month for each year you waited. The exception is if you are still working and covered by your employer's health plan — then you can delay without penalty.

Part D prescription drug plan costs

Part D is optional, but if you do not join when you first turn 65 and you do not have other drug coverage, you pay a penalty for as long as you have Medicare. The penalty is about 1 percent of the national average Part D premium per month for each month you were without coverage. In 2024, that adds roughly $10 to $15 per month to your premium.

Part D premiums vary widely by plan and location. Some plans cost $5 per month; others cost $100 or more. You choose a plan during the annual enrollment period in the fall, and the plan you pick determines your monthly premium. Like Part B, if your income is higher than $97,000 (single) or $194,000 (married), you pay an income-related surcharge on top of the plan premium.

When you use Part D, you also pay out-of-pocket costs. Most plans have a deductible (often $100 to $500 in 2024), then you pay a copay or coinsurance for each prescription. Once you and the plan together spend $5,050 in 2024, you enter the "coverage gap" where you pay a larger share of drug costs. After you spend $8,550 out of pocket in 2024, catastrophic coverage kicks in and your costs drop again.

Medicare Advantage plan costs

Medicare Advantage (Part C) is an alternative to Original Medicare (Parts A and B). Instead of paying Part B premiums and deductibles separately, you join a private plan that covers hospital, doctor, and usually prescription drug services all in one. Many Medicare Advantage plans have zero monthly premiums, though some charge $50 to $200 per month. The trade-off is that you typically pay more when you see a doctor — often a copay of $20 to $50 per visit — and you must use doctors and hospitals in the plan's network.

Medicare Advantage plans have yearly out-of-pocket limits. In 2024, that limit is $8,550 for in-network care. Once you reach it, the plan pays 100 percent of covered services for the rest of the year. Original Medicare has no yearly out-of-pocket limit, which is why some people choose Original Medicare with a Medigap plan instead.

If you choose Medicare Advantage, you still pay Part A and Part B taxes through your premiums, but you do not pay Part B premiums separately. If your income is high, you still pay the income-related surcharge on Part B, even though you are in a Medicare Advantage plan.

Medigap supplemental insurance costs

Medigap (also called Medigap insurance) is a supplemental policy sold by private insurers that covers some of the costs that Original Medicare does not — like deductibles, coinsurance, and copays. It is different from Medicare Advantage. With Medigap, you keep Original Medicare and add a Medigap plan on top.

Medigap premiums vary by plan type, your age, your location, and the insurance company. A basic Medigap plan might cost $100 to $200 per month; a more comprehensive plan might cost $200 to $400 per month. Medigap plans are standardized by the federal government, so Plan G from one company covers the same things as Plan G from another company — the difference is price. You can shop around and switch plans during the annual enrollment period.

If you add Medigap to Original Medicare, your total monthly cost is Part B premium plus your Medigap premium. You still pay Part A deductibles and Part B deductibles out of pocket initially, but the Medigap plan covers them after that. This path often costs more per month than Medicare Advantage, but you have more flexibility in which doctors you can see.

Income-related premiums and how they work

If your income is above a certain level, Medicare charges you higher premiums for Part B and Part D. These are called Income-Related Monthly Adjustment Amounts (IRMAA). The income thresholds are based on your Modified Adjusted Gross Income (MAGI) from two years before — so in 2024, Medicare looks at your 2022 tax return.

The income thresholds change each year. In 2024, the first surcharge kicks in at $97,000 for single filers and $194,000 for married couples filing jointly. If you are above these thresholds, you pay more for Part B and Part D. The surcharge can be $70 to $350 per month for Part B and $15 to $77 per month for Part D, depending on how much your income exceeds the threshold.

If your income drops — because you retire, have a major life event, or lose income — you can ask Medicare to recalculate your IRMAA. You must file a form and provide proof of the change. This can lower your premiums right away instead of waiting for the next year's adjustment.

How to estimate your total monthly cost

To figure out what Medicare will cost you, start with the parts you plan to use. If you choose Original Medicare, add Part B premium ($174.70 base in 2024, plus any income surcharge) plus Part D premium (varies by plan, plus any income surcharge). Then add the cost of a Medigap plan if you want one. If you choose Medicare Advantage, add the plan premium (often $0, but check your plan) plus any income surcharge on Part B.

Remember that the monthly premium is only part of your cost. You also pay deductibles, copays, and coinsurance when you use care. Original Medicare with Medigap usually has predictable monthly costs but higher premiums. Medicare Advantage usually has lower or zero premiums but higher costs per visit. The right choice depends on how much care you expect to use and which doctors you want to see.

You can compare plans and see estimated costs on Medicare.gov. The plan finder tool lets you enter your prescriptions and doctors to see which plans cover them and what your costs would be. You can also call 1-800-MEDICARE to speak with someone who can walk you through the options.

Frequently Asked Questions

Does everyone pay the same Part B premium?

No. The base premium is the same for most people, but if your income is above $97,000 (single) or $194,000 (married), you pay a surcharge. The surcharge amount depends on how much your income exceeds the threshold. Medicare looks at your tax return from two years ago to calculate this.

What happens if I do not enroll in Part D when I turn 65?

You pay a permanent penalty of about 1 percent of the national average Part D premium per month for each month you were without coverage. This penalty stays on your premiums for as long as you have Medicare, even if you join a plan later. The only exception is if you had other creditable drug coverage during that time.

Is Medicare free?

Part A is free for most people, but Part B, Part D, and any supplemental or Medicare Advantage plan cost money. Even with Part A free, you pay deductibles and coinsurance when you use hospital services. Most people pay at least $175 to $300 per month for Part B and prescription drug coverage.

Can I switch plans if my costs are too high?

Yes. You can change your Part B plan, Part D plan, or Medicare Advantage plan during the annual enrollment period from October 15 to December 7 each year. Changes take effect January 1. If you have a major life event like losing income or moving, you may be able to switch outside the enrollment period.

What is the difference between Original Medicare and Medicare Advantage in terms of cost?

Original Medicare has higher monthly premiums (Part B plus Part D plus possibly Medigap) but predictable costs once you meet deductibles. Medicare Advantage often has lower or zero premiums but higher per-visit copays and an annual out-of-pocket limit. The total you pay depends on how much care you use.