Medicare costs vary by the type of coverage you choose and how much medical care you use

Medicare is not free. You pay premiums (monthly fees), deductibles (the amount you pay before coverage kicks in), and copayments or coinsurance (your share of each service). The exact cost depends on whether you choose Original Medicare (Part A and Part B) or a Medicare Advantage plan, which plan you pick, and how much health care you actually receive in a year.

Most people who worked 10 years or more in jobs where they paid Medicare taxes do not pay a premium for Part A (hospital insurance). Part B (medical insurance) has a monthly premium that changes each year. In 2024, the standard Part B premium is $164.90 per month, though some people pay more based on their income. Part D (prescription drug coverage) premiums vary by plan and range from roughly $7 to $100 per month, depending on which plan you choose and where you live.

Medicare Advantage plans (Part C) often have lower or zero premiums than Original Medicare, but they usually have higher copayments when you use services. These plans are offered by private insurance companies and bundle Part A, Part B, and usually Part D into one plan.

Key Takeaways

  • Part A (hospital) is usually free if you worked long enough; Part B (medical) costs a monthly premium that increases with income.
  • You pay a deductible before Original Medicare coverage starts, and then you pay coinsurance (a percentage of costs) for most services.
  • Part D (prescription drugs) premiums range widely by plan, and you pay more if you earn above certain income thresholds.
  • Medicare Advantage plans often have lower premiums but higher copayments, and they limit which doctors and hospitals you can use.
  • Out-of-pocket costs in Original Medicare have a yearly limit; costs in Medicare Advantage plans vary by plan.

Part A and Part B premiums and deductibles

Most people do not pay a premium for Part A if they or their spouse paid Medicare taxes for at least 10 years while working. If you did not work long enough, Part A costs up to $505 per month in 2024, though the exact amount depends on how many quarters of coverage you have.

Part B has a monthly premium. The standard amount in 2024 is $164.90, but you pay more if your income was above a certain level two years ago. For example, if you earned more than $97,000 as a single person in 2022, your 2024 Part B premium is higher. The income thresholds change each year, and the extra amount you pay is called an Income-Related Monthly Adjustment Amount (IRMAA).

Once you meet your deductible, Original Medicare covers most of the cost of services. In 2024, the Part B deductible is $240 per year. After you pay that, you typically pay 20 percent of the cost for most services, and Medicare pays 80 percent. For hospital stays under Part A, you pay a deductible of $1,632 per stay in 2024, then Medicare covers most costs for the first 60 days.

How prescription drug coverage (Part D) costs work

Part D premiums vary by plan and by region. You choose a plan during your enrollment period, and the premium you pay each month depends on which plan you pick. Plans are offered by private insurance companies, so you compare them yourself or use the Medicare Plan Finder tool on Medicare.gov.

In addition to the monthly premium, you pay a deductible (usually between $0 and $545 in 2024, depending on the plan), then a copayment or coinsurance for each prescription. After you and your plan spend a certain amount on drugs in a year, you enter the "coverage gap" — a phase where you pay a larger share of drug costs. Once your out-of-pocket spending reaches a yearly limit (about $7,050 in 2024), catastrophic coverage kicks in and you pay a small copayment for the rest of the year.

If your income is below certain thresholds, you may pay lower premiums and deductibles for Part D. Contact your local Social Security office or call 1-800-MEDICARE to ask whether you may have access to for Extra Help, a program that reduces Part D costs for people with limited income and resources.

Medicare Advantage plan costs

Medicare Advantage plans are sold by private insurance companies and include Part A, Part B, and usually Part D in one plan. Many have a $0 monthly premium, meaning you pay only the Part B premium to Medicare and nothing extra to the insurance company. However, you typically pay a copayment every time you see a doctor or use a service — often $10 to $50 per visit, depending on the plan.

Medicare Advantage plans have an out-of-pocket maximum, which is a yearly limit on what you pay for covered services. Once you reach that limit, the plan pays 100 percent of covered services for the rest of the year. In 2024, the maximum out-of-pocket limit is $7,550 for in-network services in most plans, though it varies by plan and region.

The trade-off is that Medicare Advantage plans usually require you to use doctors and hospitals in their network. If you go out of network, you pay more or the plan may not cover the service at all. Some plans cover services outside the network in emergencies, but you should check the plan details before you enroll.

Supplemental insurance (Medigap) costs

If you have Original Medicare, you can buy a Medigap policy from a private insurance company to cover some of the costs that Medicare does not — such as copayments, coinsurance, and deductibles. Medigap premiums vary widely by plan type, your age, your location, and the insurance company. Plans range from basic coverage to comprehensive coverage, and premiums can be $100 to $300 or more per month.

Medigap is separate from Medicare and is not the same as Medicare Advantage. With Medigap, you keep Original Medicare and add a supplemental policy on top. You can see any doctor or hospital that accepts Medicare, and Medigap helps pay your share of costs.

Income-based premium increases (IRMAA)

If your income is above certain thresholds, you pay higher premiums for Part B and Part D. Medicare uses your income from two years ago to calculate this, so your 2024 premiums are based on your 2022 income. The income thresholds are different for single people and married couples filing jointly.

In 2024, for example, a single person with income above $97,000 pays a higher Part B premium. The more you earn above the threshold, the more you pay. If your income changes — because you retire, sell a home, or have a major life event — you can request that Medicare recalculate your premiums using your current year income. Contact Social Security to ask about a Life-Changing Event appeal.

Out-of-pocket spending limits and catastrophic coverage

In Original Medicare, there is no yearly limit on what you pay out of pocket for Part B services. However, once you spend a certain amount on Part A hospital services in a benefit period, Medicare covers 100 percent. For Part D, catastrophic coverage begins once your out-of-pocket spending reaches about $7,050 in 2024, and then you pay only a small copayment for the rest of the year.

Medicare Advantage plans have a yearly out-of-pocket maximum. Once you reach it, the plan pays 100 percent of covered in-network services for the rest of the year. This can be helpful if you have high medical costs, because you know your maximum spending in advance.

How to estimate your yearly Medicare costs

Your total yearly cost depends on which type of coverage you choose, how much health care you use, and your income. If you use very little health care, your costs may be just the monthly premiums. If you have chronic conditions and see doctors often, you will reach your deductible and pay coinsurance or copayments throughout the year.

Medicare.gov has a Plan Finder tool where you can enter your prescriptions and doctors to see estimated costs for different plans in your area. You can also call 1-800-MEDICARE to speak with someone who can walk you through the costs of different plans. Your State Health Insurance information Program (SHIP) offers free counseling to help you compare plans and understand your costs — find your state's SHIP by searching "SHIP" plus your state name online.

Frequently Asked Questions

Do I have to pay for Part A if I worked long enough?

If you or your spouse paid Medicare taxes for at least 10 years while working, you do not pay a Part A premium. If you did not work long enough, Part A costs up to $505 per month in 2024. You can check your work history on your Social Security account at ssa.gov.

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

Your Part B premium is higher if your income was above certain thresholds two years ago. This extra charge is called IRMAA. The thresholds and amounts change each year. If your income has dropped since then, you can ask Social Security to recalculate your premium.

Can I switch from Original Medicare to Medicare Advantage or back?

You can switch during the Annual Enrollment Period (October 15 to December 7 each year) or if you have a may have access to life event like moving, losing other coverage, or a major change in income. Outside these windows, you cannot switch plans.

What happens if I cannot afford my Medicare premiums?

If your income is low, you may may have access to for programs like Extra Help (for Part D costs) or Medicaid (which can pay your Part B premium). Contact your state Medicaid office or call 1-800-MEDICARE to learn what programs you may be able to use.

Does Medicare cover dental, vision, or hearing?

Original Medicare does not cover routine dental, vision, or hearing care. Some Medicare Advantage plans include these benefits, though coverage is usually limited. If you need these services, you can buy separate coverage or pay out of pocket.