Medicare pays a share of your medical bills, but not all of them, and the share changes depending on which type of Medicare you have and what service you need

Medicare is health insurance, not a program that covers everything. The amount Medicare pays depends on three things: which part of Medicare you're using (Part A for hospital care, Part B for doctor visits, Part D for drugs), whether you've met your deductible that year, and what the service actually costs. A colonoscopy might be fully covered under Part B preventive care, but an office visit for a chronic condition might require you to pay a copay. A hospital stay might leave you responsible for thousands of dollars after Medicare pays its share.

The payment amounts change every year, and they vary based on where you live and which provider you see. This guide explains how much you'll typically pay out of pocket and what determines that amount.

Key Takeaways

  • Medicare Part A (hospital insurance) covers inpatient hospital stays after you pay a deductible, but you pay coinsurance for stays longer than 60 days.
  • Medicare Part B (medical insurance) covers doctor visits and outpatient services after you pay a deductible and usually a 20% coinsurance.
  • Part D (prescription drug coverage) requires you to pay a monthly premium, annual deductible, and copays or coinsurance that vary by drug tier.
  • Original Medicare does not have an out-of-pocket maximum, so catastrophic illness can result in very high costs; Medicare Advantage plans do have a maximum.
  • Preventive services like screenings and vaccines are covered at no cost to you under both Original Medicare and Medicare Advantage.

How Medicare Part A (Hospital Insurance) Pays

Part A covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health services. When you're admitted to a hospital, Medicare pays most of the cost after you pay the Part A deductible. For 2024, that deductible is $1,632 per benefit period (the amount changes yearly). After you pay the deductible, Medicare covers all approved hospital charges for the first 60 days of your stay.

If you stay longer than 60 days, you enter a coinsurance period. From day 61 to day 90, you pay a daily coinsurance amount (in 2024, that's $408 per day). If you stay even longer, from day 91 onward, you pay a higher daily amount ($816 per day in 2024) and you're drawing down a limited number of "lifetime reserve days" — 60 total days that Medicare will ever cover at this higher rate across your entire life. Once those are gone, you pay the full cost.

For skilled nursing facility care (not regular nursing home care, but short-term rehabilitation after a hospital stay), Medicare covers the first 20 days fully after you've met the Part A deductible. From day 21 to day 100, you pay a daily coinsurance amount ($204 per day in 2024). After day 100, Medicare pays nothing.

How Medicare Part B (Medical Insurance) Pays

Part B covers doctor visits, outpatient surgery, diagnostic tests, durable medical equipment, and most other services that aren't hospital stays. You pay a monthly premium for Part B (the standard amount in 2024 is $164.90, but higher earners pay more). You also pay an annual deductible ($240 in 2024), and after that, Medicare typically pays 80% of the approved amount while you pay 20%.

The "approved amount" is crucial: it's not what your doctor charges, but what Medicare decides that service is worth. If your doctor charges more than the approved amount and doesn't accept Medicare assignment, you may owe the difference. If your doctor does accept assignment (most do), you only owe the 20% coinsurance on Medicare's approved amount.

Preventive services are an exception: screenings like colonoscopies, mammograms, and bone density scans, plus vaccines like flu and pneumonia shots, are covered at no cost to you after you've met your deductible — in fact, many don't require the deductible at all. Your doctor's office can tell you which services are considered preventive.

How Medicare Part D (Prescription Drug Coverage) Pays

Part D is optional coverage for prescription drugs. You choose a plan from private insurance companies, and each plan has its own monthly premium, annual deductible, and list of covered drugs (called a formulary). The deductible varies by plan but is capped at $545 in 2024.

After you meet the deductible, you enter the initial coverage phase. You pay a copay or coinsurance for each drug, and the amount depends on which "tier" the drug is on. Tier 1 drugs (usually generics) have the lowest copay; Tier 5 drugs (usually brand-name biologics) have the highest. You and your plan split the cost until your out-of-pocket spending reaches a yearly limit ($11,000 in 2024).

Once you hit that limit, you enter catastrophic coverage, where Medicare pays most of the cost and you pay a small copay or coinsurance. The exact amounts change yearly and vary by plan, so check your plan's summary of benefits or call the plan directly to understand what you'll pay for your specific medications.

The Difference Between Original Medicare and Medicare Advantage

Original Medicare (Parts A and B) has no out-of-pocket maximum. If you have a serious illness or injury, your costs can grow without limit. Some people buy supplemental insurance (Medigap) to cover the gaps, but that's an additional premium.

Medicare Advantage (Part C) is an alternative to Original Medicare, offered by private insurance companies. It must cover everything Original Medicare covers, but it operates more like employer health insurance: you typically pay a monthly premium, a deductible, copays for visits, and coinsurance. The key difference is that Medicare Advantage plans have an out-of-pocket maximum — once you hit it in a year, the plan pays 100% of covered services for the rest of that year. In 2024, that maximum is capped at $8,000 for in-network care.

Medicare Advantage plans often include dental, vision, and hearing coverage that Original Medicare doesn't. However, you must use doctors and hospitals in the plan's network (except in emergencies), and you may need prior authorization for certain services.

What Affects How Much You Pay

Your income determines your Part B and Part D premiums. If your modified adjusted gross income is above a certain threshold, you pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of the standard premium. For 2024, this kicks in at $97,000 for single filers and $194,000 for married couples filing jointly, and the extra amount can be substantial.

Where you live also matters. Medicare's approved amounts for services vary by geographic region, so the same doctor visit might result in different out-of-pocket costs depending on your state. If you travel or move, your costs may change.

Whether your provider accepts Medicare assignment affects what you owe. Most doctors and hospitals do accept assignment, meaning they agree to accept Medicare's approved amount as payment in full (minus your coinsurance). If a provider doesn't accept assignment, you could owe the difference between what they charge and what Medicare approves.

When to Ask Your Doctor or Medicare About Costs

Before a scheduled procedure or test, ask your doctor's office what the Medicare-approved amount is and what you'll owe. They can often tell you on the spot, or they can look it up. If you're considering a service that's not routine, ask whether Medicare covers it at all — some treatments, devices, or services are not covered.

If you receive a bill that seems wrong, compare it to your Medicare Summary Notice (the statement Medicare sends you showing what was billed and what Medicare paid). If the bill doesn't match, call your provider's billing department and ask for an explanation. If you believe Medicare made an error, you can file an appeal.

For questions about your specific coverage, call Medicare at 1-800-MEDICARE (1-800-633-4227). They can tell you whether a specific service is covered under your plan and what you'll likely pay.

Frequently Asked Questions

Does Medicare cover everything after I pay my deductible?

No. Medicare covers its approved amount for most services, but you typically pay 20% coinsurance on top of the deductible. Some services, like preventive care, are fully covered. Others, like routine dental or vision care, are not covered at all. Your plan documents list what is and isn't covered.

What happens if I can't afford my Medicare costs?

Several programs help low-income seniors pay Medicare premiums and cost-sharing. The Medicare Savings Program helps pay Part B and Part D premiums. The Low-Income Subsidy program helps pay Part D costs. Your state Medicaid program may also help. Contact your local Area Agency on Aging or call 1-800-MEDICARE to learn what you might be able to access.

Why did my Medicare costs go up this year?

Medicare deductibles, copays, and premiums change every January. The changes are based on inflation, healthcare costs, and changes to the program. You should receive a notice in the mail explaining what changed in your coverage. If you have a Medicare Advantage plan, your plan may have changed its copays or network, so review your new plan documents.

Can I switch plans if my costs are too high?

Yes, during the Annual Enrollment Period (October 15 to December 7 each year), you can switch from Original Medicare to Medicare Advantage, between Medicare Advantage plans, or add or change Part D coverage. If you have a may have access to life event (like moving, losing other insurance, or a major change in income), you may be able to switch outside this window.

Does Medicare pay for home health care?

Medicare Part A covers skilled home health services (like nursing care or physical therapy) after a hospital stay or may have access to event, with no copay. It does not cover custodial care (help with bathing, dressing, or housekeeping) unless it's part of a skilled service. Your doctor must order the home health care, and a Medicare-approved agency must provide it.