Medicare costs you money in four ways: a monthly premium, a yearly deductible, copayments when you use care, and coinsurance (a percentage of the bill). The amount depends on which parts of Medicare you choose and your income. Part A (hospital insurance) is free for most people at 65. Part B (doctor visits) costs around $165 per month in 2024, though this varies yearly. Part D (prescription drugs) and Medigap or Medicare Advantage plans add their own costs on top.

Key Takeaways

  • Part A hospital insurance is free for most people who paid Medicare taxes while working, with no monthly premium.
  • Part B doctor insurance costs roughly $165 monthly in 2024, but the exact amount changes each year and is higher if you enroll late.
  • Part D prescription drug plans range from about $7 to $100+ per month depending on the plan and your medications.
  • Medigap supplemental plans and Medicare Advantage plans each have their own monthly premiums, typically $100 to $300 per month.
  • If your income is above a certain threshold, you pay an extra surcharge on top of the standard Part B and Part D premiums.

Part A: Hospital Insurance Costs

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 do not pay a monthly premium for Part A — it is free when you turn 65.

However, you do pay when you use the hospital. In 2024, you pay a one-time deductible of $1,632 per hospital stay (this amount changes yearly). After that deductible, you pay nothing for the first 60 days of a hospital stay. Days 61 through 90 cost you about $408 per day. If you stay longer than 90 days, costs rise further. Skilled nursing facilities work the same way: free for the first 20 days after a hospital stay, then about $204 per day for days 21 through 100.

If you did not work long enough to earn free Part A, you can buy it. The monthly premium is around $278 to $505 depending on your work history, and it also changes yearly.

Part B: Doctor and Outpatient Care Costs

Part B covers doctor visits, outpatient care, lab tests, X-rays, and medical equipment. The standard monthly premium in 2024 is about $165, but this amount increases each year. You pay this premium whether you use the benefit or not.

On top of the premium, you also pay a yearly deductible — $240 in 2024 — before Medicare starts to help. After you meet the deductible, Medicare typically pays 80% of approved charges and you pay 20%. This 20% is called coinsurance, and it has no yearly cap, so a serious illness or injury can mean large out-of-pocket costs.

If you delay enrolling in Part B after you turn 65 (and you are not covered by an employer plan), your premium goes up permanently. For each year you wait, you pay an extra 10% on top of the standard premium for the rest of your life. This is called a late enrollment penalty.

Income-Related Monthly Adjustment Amount (IRMAA)

If your income is above a certain level, you pay more for Part B and Part D. This extra charge is called the Income-Related Monthly Adjustment Amount, or IRMAA. In 2024, if your income is above $97,000 as a single person or $194,000 as a married couple filing jointly, you will owe extra.

The surcharge is tiered — the higher your income, the more you pay. A single person earning $120,000 might pay an extra $66 per month on top of the standard Part B premium. Someone earning $250,000 might pay an extra $560 per month. These amounts change yearly based on income thresholds set by Social Security.

Medicare uses your tax return from two years ago to calculate IRMAA. If your income drops due to retirement, divorce, or death of a spouse, you can ask Medicare to recalculate using your current income instead of the old tax return.

Part D: Prescription Drug Plan Costs

Part D covers prescription medications. You choose a plan from private insurance companies, and each plan has its own monthly premium, yearly deductible, and copayments. Premiums typically range from about $7 to $100+ per month, depending on which drugs the plan covers and how popular the plan is in your area.

Most Part D plans have a yearly deductible (often $100 to $500) that you pay before the plan starts helping. After that, you pay a copayment or coinsurance for each prescription. The copayment might be $5 for a generic drug and $50 for a brand-name drug, for example.

If you do not enroll in Part D when you first become may be able to access at 65, you pay a late enrollment penalty of about 1% of the national average Part D premium for each month you delay. If you wait three years, that penalty stays with you permanently.

Medigap Supplemental Insurance Costs

Medigap (also called Supplement insurance) is sold by private companies and covers costs that Original Medicare does not — like the 20% coinsurance after you meet the Part B deductible. It is separate from Medicare Advantage and works alongside Original Medicare Parts A and B.

Medigap plans are labeled A through N, and each plan covers a different set of costs. Plan A is the most basic and cheapest, often $100 to $150 per month. Plan G or Plan N are more popular and might cost $150 to $300 per month depending on your age, location, and the insurance company. Some plans cover the Part B deductible; others do not.

Medigap premiums vary widely by location and insurance company. A plan that costs $120 per month in one state might cost $180 in another. You can compare plans and prices on Medicare.gov or by calling insurance companies directly.

Medicare Advantage Plan Costs

Medicare Advantage (Part C) is an alternative to Original Medicare. It is run by private insurance companies and usually has a lower or zero monthly premium than Medigap, but it typically includes a network of doctors you must use (like an HMO or PPO). You still pay Part B premiums to Medicare, then pay the Advantage plan's premium on top.

Many Medicare Advantage plans have zero monthly premium beyond Part B, but you pay copayments when you visit a doctor (often $10 to $50 per visit) and coinsurance for hospital stays. Some plans include Part D drug coverage built in; others do not. Out-of-pocket costs are capped — in 2024, the maximum is around $8,300 per year — so you know your worst-case spending.

Medicare Advantage plans vary by location. Your options in one county may be completely different from options 50 miles away. You can see which plans are available in your area on Medicare.gov during the annual enrollment period (October 15 to December 7).

How Costs Change Year to Year

Medicare premiums, deductibles, and copayments change every January. The Part B premium and deductible are set by Congress based on the cost of care and inflation. Part D premiums are set by each insurance company based on drug costs in their region. Medigap and Medicare Advantage premiums are set by each insurance company and may increase annually.

You receive a notice in the mail each fall showing your new costs for the coming year. If your costs are going up and you want to switch plans, you have until December 7 to make changes that take effect January 1. If you do not switch, you stay in your current plan at the new rates.

Frequently Asked Questions

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

If you did not work long enough to earn free Part A, you can buy it. The monthly premium is around $278 to $505 depending on your work history. Your spouse's work record may also may have access to you for free Part A if you have been married at least one year.

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

If your income is low, you may be able to get help paying premiums through Medicaid or a program called Medicare Savings Programs. Contact your state Medicaid office or call 1-800-MEDICARE to learn whether you may have access to. Some community health centers also offer financial information.

Can I change my Medicare plan if costs go up?

Yes. During the annual enrollment period from October 15 to December 7, you can switch to a different Part D plan, Medicare Advantage plan, or Medigap plan. Changes take effect January 1. If you have a major life event like loss of income, you may be able to change plans outside this window.

Why is my Part B premium higher than my neighbor's?

Your premium may be higher because of IRMAA — an income surcharge. If your income is above the threshold, you pay extra. You may also be paying a late enrollment penalty if you delayed signing up for Part B after turning 65. Both of these increase your monthly cost.

Do I need both Medigap and Medicare Advantage?

No. You choose one or the other. Medigap works with Original Medicare (Parts A and B) to cover gaps in coverage. Medicare Advantage replaces Original Medicare and includes its own network of doctors. You cannot have both at the same time.