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

The amount you pay depends on which part of Medicare you have, your income, and when you signed up. Part A (hospital insurance) is free for most people at 65. Part B (doctor visits and outpatient care) costs money every month — the standard amount in 2024 is $174.70, but you may pay more or less based on your income from two years ago. Part D (prescription drugs) varies by plan, typically $7 to $100+ per month. Supplemental insurance (Medigap) or Medicare Advantage plans add their own costs on top.

This article walks through what each part costs, how income affects your payments, and what happens if you delay signing up. The numbers change yearly, so check the official Medicare website or call 1-800-MEDICARE for current figures in your situation.

Key Takeaways

  • Part A is free for most people; Part B costs a monthly premium that rises with your income from two years prior.
  • You also pay a deductible before Part B coverage begins ($240 in 2024) and copayments when you use services.
  • Part D (drug coverage) premiums vary by plan and region, and missing the sign-up window can add a penalty to your premium permanently.
  • If your income is above a certain threshold, you pay an extra amount called IRMAA (Income-Related Monthly Adjustment Amount) on top of your Part B and Part D premiums.
  • Medigap or Medicare Advantage plans cover some costs Medicare does not, but they charge their own premiums and may have network restrictions.

Part A and Part B: Hospital and Doctor Coverage

Part A covers hospital stays, skilled nursing facility care, hospice, and some home health services. Most people pay nothing for Part A because they or their spouse paid Medicare taxes while working. If you do not have 40 quarters of Medicare tax history, you can buy Part A; the premium in 2024 ranges from $278 to $556 per month depending on your work history.

Part B covers doctor visits, outpatient surgery, lab tests, imaging, and medical equipment. The standard monthly premium in 2024 is $174.70, but the actual amount you pay depends on your Modified Adjusted Gross Income (MAGI) from two years before you turn 65 or enroll. If your income is above $97,000 (single) or $194,000 (married filing jointly), you pay a higher premium called IRMAA. The extra amount can range from $69.90 to $560.50 per month on top of the standard premium.

When you use Part B services, you also pay a $240 annual deductible (2024) before Medicare starts paying its share. After that, you typically pay 20 percent of the approved amount for most services. There is no yearly out-of-pocket limit under Original Medicare, so costs can add up if you need frequent care.

Part D: Prescription Drug Coverage

Part D is optional but important: if you do not sign up when you first become may be able to access and you go without drug coverage, Medicare adds a penalty to your Part D premium for as long as you have Medicare. The penalty is roughly 1 percent of the national average premium for each month you were not covered.

Part D premiums vary by plan and region. In 2024, premiums typically range from $7 to $100+ per month, depending on which insurance company offers the plan and which drugs it covers. When you use your prescription, you pay a copayment or coinsurance (a percentage of the cost). The amount depends on the drug's tier — generic drugs usually cost less than brand-name drugs.

Part D also has a coverage gap called the "donut hole." Once you and your plan have paid a certain amount for drugs in a year, you enter the gap and pay a higher share of drug costs until you reach a catastrophic coverage threshold. The exact amounts change yearly. Many people with low incomes or high drug costs may may have access to for help paying Part D costs through the Low-Income Subsidy program.

Income-Related Monthly Adjustment Amount (IRMAA)

If your income is above a certain level, you pay an extra amount on your Part B and Part D premiums. This is called IRMAA. Medicare uses your Modified Adjusted Gross Income from two years before you enroll or turn 65, so the income threshold that affects you in 2024 is based on your 2022 tax return.

In 2024, if you are single and your MAGI is over $97,000, you pay extra. If you are married filing jointly, the threshold is $194,000. The extra amount increases in brackets: the more your income exceeds the threshold, the more you pay. For example, a single person with a MAGI of $120,000 pays more than someone with a MAGI of $100,000.

If your income drops — because you retire, sell a home, or have a life event — you can ask Medicare to recalculate your IRMAA. You must report the change and provide proof, such as a recent tax return or a letter from your employer. This is called a life-changing event appeal.

Medigap and Medicare Advantage: Supplemental Coverage Costs

Original Medicare (Part A and Part B) does not cover everything. You can buy a Medigap (supplemental insurance) plan from a private insurer to cover copayments, coinsurance, and deductibles that Original Medicare leaves you to pay. Medigap premiums vary widely 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 can cost $300 to $500+ per month.

Alternatively, you can choose a Medicare Advantage plan (Part C), which is an all-in-one plan offered by a private insurer that covers Part A, Part B, and usually Part D. Medicare Advantage plans often have lower or zero premiums, but they typically have network restrictions (you must use doctors in the plan's network) and may have higher copayments or coinsurance when you use care. Some plans charge $0 per month; others charge $50 to $200+ per month.

The trade-off is important: Medigap gives you more freedom to see any doctor but costs more upfront. Medicare Advantage limits your choice of doctors but may cost less if you use in-network care. Both are optional; you can stick with Original Medicare and pay out-of-pocket for uncovered costs.

What Happens If You Delay Enrollment

If you do not sign up for Part B when you first become may be able to access at 65, you pay a permanent penalty on your Part B premium. The penalty is 10 percent of the standard premium for each full year you were not covered. If you delay for three years, you pay 30 percent extra on top of your premium for the rest of your life.

The same rule applies to Part D: missing the sign-up window adds a penalty to your drug premium permanently. The only exceptions are if you had other creditable drug coverage (such as coverage through an employer or union) or if you may have access to for a Special Enrollment Period because of a life event like losing employer coverage.

If you are still working at 65 and have health insurance through your job, you may be able to delay Part B without penalty if your employer has 20 or more employees. You must sign up within eight months of losing that coverage to avoid a penalty. This is called the Special Enrollment Period for group health plan coverage.

Annual Changes and How to Find Your Specific Costs

Medicare premiums, deductibles, and copayments change every January. The amounts announced in the fall explore to the following year. To find out what you will pay, visit Medicare.gov, call 1-800-MEDICARE, or visit your local Social Security office.

Your actual costs depend on your specific situation: your income, which parts of Medicare you choose, which plan you pick (if you choose Medicare Advantage or Medigap), which doctors and hospitals you use, and which drugs you take. Two people the same age can pay very different amounts. Use the Medicare Plan Finder tool on Medicare.gov to compare costs for plans available in your zip code.

If you have limited income, you may may have access to for programs that help pay your premiums and out-of-pocket costs. These include the Low-Income Subsidy (for Part D), the Medicare Savings Programs (for Part B premiums and cost-sharing), and Medicaid (if your state offers it). Your local Area Agency on Aging or a 211 referral can tell you whether you may have access to.

Frequently Asked Questions

Do I have to pay for Part A?

Most people do not pay a premium for Part A because they or their spouse paid Medicare taxes for at least 40 quarters (10 years) while working. If you do not have that work history, you can buy Part A; the cost in 2024 ranges from $278 to $556 per month depending on how many quarters of coverage you have.

What is the difference between what I pay now and what I will pay later?

Your Part B premium is based on your income from two years ago, so it may not reflect your current situation. If your income has dropped since then, you can ask Medicare to recalculate your IRMAA. Changes take effect the month after Medicare processes your request.

Can I change my plan if my costs are too high?

Yes. You can switch plans during the Annual Enrollment Period (October 15 to December 7 each year). If you have a life event like losing income or moving, you may be able to change plans outside the enrollment window. Contact Medicare to ask about a Special Enrollment Period in your situation.

Will my costs go down if I wait to sign up for Medicare?

No. Delaying Part B or Part D adds a permanent penalty to your premium. The longer you wait, the higher the penalty. The only exception is if you have other creditable coverage (such as through an employer) and sign up within the allowed window after that coverage ends.

What if I cannot afford my Medicare costs?

Several programs help people with limited income pay premiums and out-of-pocket costs. The Medicare Savings Programs pay Part B premiums and cost-sharing for people with income between 100 and 200 percent of the federal poverty level. The Low-Income Subsidy helps with Part D premiums and copayments. Contact your local Area Agency on Aging or call 211 to learn what you may may have access to for.