Medicare costs you money in two ways: premiums you pay monthly, and out-of-pocket costs when you use care

Most people pay a Part B premium — the main monthly charge for doctor visits and outpatient care. In 2024, the standard Part B premium is $164.90 per month, but yours may be higher if your income was above $97,000 as a single filer two years ago. You also pay a Part A premium only if you did not work long enough to may have access to for free Part A; most people do not pay this.

If you choose a Medicare Advantage plan (Part C) instead of Original Medicare, your monthly premium varies by plan and location — some plans charge zero premium, others charge $50 to $200 or more. If you add prescription drug coverage (Part D), that costs $5 to $100+ per month depending on the plan. These are on top of your Part B premium unless your plan bundles them.

Your actual out-of-pocket costs also depend on how much care you use. You pay a $240 deductible before Part B starts covering anything in 2024. After that, you pay 20 percent of the cost for most services. Hospital stays have their own deductible ($1,632 in 2024) and different cost-sharing rules.

Key Takeaways

  • The standard Part B premium in 2024 is $164.90 per month, but you may pay more if your income was high two years ago.
  • Medicare Advantage plans have their own premiums, which vary by plan and can be zero, but you still pay Part B unless you are in a special circumstance.
  • Prescription drug coverage costs extra and ranges widely depending on which plan you choose and which drugs you take.
  • You also pay deductibles and cost-sharing (copays and coinsurance) when you actually use care, separate from your monthly premium.
  • Your income from two years ago determines whether you pay a higher premium, so your costs may change each year.

Part B Premium and Income-Related Adjustments

The Part B premium is the most common monthly charge. The standard amount changes each year — it was $164.90 in 2024. However, if your modified adjusted gross income (MAGI) from two years prior was above a certain threshold, Medicare charges you more. For 2024, single filers with income above $97,000 pay a surcharge on top of the base premium. Married couples filing jointly pay more if their income exceeded $194,000.

These income thresholds are fixed, so they do not adjust for inflation. That means more people cross into a higher bracket each year even if their income stays the same. You can request a review if your income dropped due to retirement, divorce, or death of a spouse — Medicare may lower your premium retroactively.

You pay Part B premium whether you are in Original Medicare or a Medicare Advantage plan. The only exception is if you are still working and covered by your employer's health plan; you may be able to delay Part B without penalty, but you still need to understand when to sign up to avoid a permanent penalty later.

Medicare Advantage Plan Premiums

A Medicare Advantage plan (Part C) is an alternative to Original Medicare offered by private insurers. Many plans charge zero monthly premium beyond what you already pay for Part B. Others charge $25 to $200 per month or more, depending on the plan and your location. Some plans offer extra benefits like dental or vision coverage, which may raise the premium.

The premium you see advertised is separate from your Part B premium — you pay both. If a plan shows "$0 premium," that means zero on top of Part B, not zero total. Plans change their premiums and coverage every year, so the plan you had last year may cost more this year or may no longer be available in your area.

You can switch Medicare Advantage plans once per year during the Annual Enrollment Period (October 15 to December 7). If you switch back to Original Medicare, you have a limited window to do so without penalty.

Prescription Drug Coverage Costs

Part D (prescription drug coverage) costs between $5 and $100+ per month depending on which plan you choose. The premium varies because different plans cover different drugs at different prices. A plan that is cheap for someone taking blood pressure medication may be expensive for someone taking cancer drugs.

You pay the Part D premium even in months when you do not fill any prescriptions. When you do fill a prescription, you also pay a copay or coinsurance — typically $5 to $50 per prescription, but much more for specialty drugs. Once you spend $5,030 out of pocket in a year (the 2024 threshold), you enter the "donut hole," where you pay a larger share until you hit the catastrophic coverage threshold of $7,050.

If you do not sign up for Part D when you first become may be able to access, you pay a permanent penalty of about 1 percent per month of delay added to your premium for life. The only exception is if you have coverage through an employer or union that is at least as good as Medicare's.

Deductibles and Cost-Sharing in Original Medicare

Beyond your monthly premium, you pay out-of-pocket costs when you use care. In Original Medicare, Part B has a $240 annual deductible (2024). Once you meet it, you pay 20 percent coinsurance for most outpatient services — doctor visits, lab work, imaging, and outpatient surgery.

Part A (hospital insurance) has its own deductible of $1,632 per benefit period (2024). A benefit period starts when you enter the hospital and ends 60 days after you leave. If you are readmitted within 60 days, you are still in the same benefit period and do not pay another deductible. Hospital stays also have daily copays after day 60 ($408 per day for days 61–90 in 2024).

Skilled nursing facility care, home health, and hospice have different cost-sharing rules. Most preventive services (screenings, vaccines, annual wellness visits) are covered at no cost after you meet your Part B deductible.

How Medicare Advantage Cost-Sharing Works Differently

Medicare Advantage plans set their own deductibles and copays, so costs vary widely by plan. Some plans have zero deductible; others have $500 or more. A copay for a doctor visit might be $10 in one plan and $50 in another. Out-of-pocket maximums also vary — in 2024, the maximum is capped at $8,050 for in-network care, but plans often set lower limits.

Once you hit your plan's out-of-pocket maximum, the plan covers 100 percent of in-network care for the rest of the year. This can be an advantage if you use a lot of care, because Original Medicare has no out-of-pocket maximum — you keep paying 20 percent coinsurance indefinitely.

Most Medicare Advantage plans include prescription drug coverage built in, so you do not pay a separate Part D premium. However, you still pay copays or coinsurance for each prescription, and the plan's formulary (list of covered drugs) may not include the drug you need.

Medigap Insurance and Supplemental Coverage

If you are in Original Medicare, you can buy a Medigap policy (supplemental insurance) from a private insurer to cover some of the costs Medicare does not. Medigap premiums range from $100 to $400+ per month depending on your age, location, and which plan letter you choose (Plan A, Plan B, Plan G, etc.). Medigap does not cover prescription drugs, so you still need Part D.

Medigap plans are standardized by the federal government, so Plan G from one insurer covers the same things as Plan G from another — the only difference is price. You can shop around and switch plans once per year. Some states allow you to switch more often or at different times.

If you have a Medicare Advantage plan, you cannot also have Medigap. The two are mutually exclusive because Medicare Advantage already includes some cost-sharing limits.

When Your Costs Change Year to Year

Medicare premiums and deductibles change every January. The Part B premium and deductible are announced in October for the following year. If you are in a Medicare Advantage or Part D plan, your plan may change its premium, deductible, and covered drugs every year — sometimes dramatically.

Your income-related premium adjustment is based on your tax return from two years ago. If you retired, got divorced, or had a major life change, your income may have dropped, but Medicare will not know until you file taxes. You can request a life-changing event adjustment by calling Social Security at 1-800-772-1213 and providing documentation.

You receive a notice in October showing your Part B premium for the next year. If the increase surprises you, that is the time to review whether a different plan would cost less. The Annual Enrollment Period runs October 15 to December 7, and changes take effect January 1.

Frequently Asked Questions

Why is my Part B premium higher than the standard amount?

Your income from two years ago was above the threshold for your filing status. Single filers with 2022 income above $97,000 pay more in 2024. You can request an adjustment if your income dropped due to retirement or a major life event — call Social Security at 1-800-772-1213 with proof.

Do I have to pay Part B if I am still working?

If you are covered by your employer's health plan, you can delay Part B without penalty. However, you must sign up within eight months of leaving that job or losing the coverage, or you will pay a permanent penalty. Talk to your employer's benefits office about your options.

Can I switch from Medicare Advantage back to Original Medicare?

Yes, during the Annual Enrollment Period (October 15 to December 7) or if you have a may have access to life event like moving out of your plan's service area. If you switch back to Original Medicare, you have a limited window to buy Medigap without medical underwriting — do not wait.

What happens if I do not sign up for Part D when I am first may be able to access?

You pay a permanent penalty of roughly 1 percent per month of delay, added to your Part D premium for life. The only exception is if you had other prescription drug coverage that was at least as good as Medicare's. Sign up during your initial enrollment period or during Annual Enrollment to avoid this penalty.

Is there a way to lower my out-of-pocket costs if I cannot afford them?

You may may have access to for Extra Help (for Part D) or Medicaid (for cost-sharing) if your income is low. Contact your state Medicaid office or call 1-800-MEDICARE to learn whether you may have access to. Some pharmaceutical companies also offer patient information programs for specific drugs.