Medicare has premiums, deductibles, and copays — the amount you pay depends on which parts you choose and your income

Medicare costs come in four pieces: a monthly premium (what you pay to have the coverage), a yearly deductible (what you pay before Medicare starts covering), copays (what you pay per visit or service), and coinsurance (your share of the cost after the deductible). The total you pay each month and year varies widely depending on whether you choose Original Medicare or a Medicare Advantage plan, whether you add prescription drug coverage, and what your income is. Most people pay something, but the amount is not the same for everyone.

This guide walks you through each cost piece so you understand what to expect and where you might find ways to pay less.

Key Takeaways

  • Part A (hospital) is free for most people at 65, but Part B (doctor visits) costs a monthly premium that increases if you sign up late.
  • Original Medicare has a yearly deductible and copays, while Medicare Advantage plans often have lower or no deductibles but may limit which doctors you can see.
  • If your income is above a certain amount, you pay a higher premium for Part B and Part D (prescription drugs).
  • You can reduce your out-of-pocket costs by choosing a Medigap plan (supplemental insurance) or a Medicare Advantage plan, but each has different costs and coverage.
  • The costs change every year, so reviewing your coverage each fall during open enrollment can save you money.

Part A and Part B premiums

Part A covers hospital stays, skilled nursing care, and hospice. Most people who worked 10 years or more in jobs where they paid Medicare taxes do not pay a monthly premium for Part A. If you did not work that long, you can still buy Part A, but the premium varies based on how many quarters of work history you have.

Part B covers doctor visits, outpatient care, and some preventive services. Everyone pays a monthly premium for Part B. In 2024, the standard Part B premium is $164.90 per month, but this amount changes each year. If you sign up for Part B after you turn 65 and are not covered by an employer plan, you pay a permanent penalty — an extra 10 percent added to your premium for each year you delayed. That penalty stays with you for life, so signing up on time matters.

If your income is above a certain threshold (in 2024, more than $97,000 for a single person or $194,000 for a married couple filing jointly), you pay an extra amount called an Income-Related Monthly Adjustment Amount, or IRMAA. This surcharge can add $70 to $560 per month to your Part B premium, depending on your income level. The income limits change each year, so what you pay may shift even if your income stays the same.

Deductibles and copays in Original Medicare

If you choose Original Medicare (Part A and Part B without a Medicare Advantage plan), you pay a yearly deductible for Part A hospital stays and a yearly deductible for Part B doctor visits. In 2024, the Part A deductible is $1,632 per hospital stay, and the Part B deductible is $240 per year. After you meet the deductible, you typically pay 20 percent coinsurance for most services — Medicare pays 80 percent.

Original Medicare has no yearly cap on what you pay out of pocket. If you have a serious illness or need extensive care, your costs can grow very high. This is why many people who choose Original Medicare also buy a Medigap (supplemental insurance) plan to cover the deductibles, copays, and coinsurance that Medicare does not pay. Medigap premiums vary by plan type and where you live, typically ranging from $100 to $300 per month. There are 10 standardized Medigap plans (labeled A through N), and each covers a different combination of costs, so comparing them can help you find one that fits your budget.

Medicare Advantage plan costs

Medicare Advantage plans (Part C) are an alternative to Original Medicare. They are offered by private insurance companies and usually have lower or no monthly premiums than Original Medicare plus Medigap combined. However, they typically have higher copays per visit and may require you to use doctors and hospitals in their network.

Most Medicare Advantage plans have a yearly out-of-pocket maximum — 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 $8,050 per person. Original Medicare has no such cap, which is a major difference. Some Medicare Advantage plans charge $0 in monthly premiums, but these plans often have higher copays and stricter network rules. Before you choose a Medicare Advantage plan, check whether your current doctors and hospitals are in the plan's network, because switching providers mid-year can be difficult.

Prescription drug coverage costs

Part D covers prescription drugs. If you do not have other drug coverage (such as through an employer or union), you should enroll in a Part D plan when you first become may be able to access at 65. If you delay, you pay a permanent penalty — 1 percent of the national average Part D premium for each month you were not covered. That penalty is added to your premium for life.

Part D plans have a monthly premium, a yearly deductible (up to $545 in 2024), copays for each prescription, and a coverage gap called the "donut hole." Once you and your plan have spent $5,850 out of pocket in 2024, you enter the donut hole, where you pay a higher percentage of drug costs until you reach the catastrophic coverage threshold. After that, you pay a small copay and the plan covers most of the cost. The exact costs depend on which Part D plan you choose — premiums range from about $7 to $100 per month, and different plans cover different drugs at different costs.

Income-based cost reductions

If your income is low, you may may have access to for Extra Help, a federal program that pays Part D premiums and reduces copays for prescriptions. You may also may have access to for Medicaid, which can cover Medicare premiums, deductibles, and copays. Each state runs Medicaid differently, so the income limits and coverage vary. Contact your state Medicaid office or call 1-800-MEDICARE to learn whether you may have access to.

Some people may have access to for Medicare Savings Programs, which help pay Part B premiums and sometimes Part A premiums and deductibles. Income limits are higher than for Extra Help, so you may may have access to even if you do not think you will. These programs are run by your state, not by Medicare. Your State Health Insurance information Program (SHIP) can tell you which programs you may be may be able to access for and help you understand the income thresholds.

How costs change year to year

Medicare premiums, deductibles, and copays change every January. The Part B premium and deductible are announced in October, and Part D plan costs are announced in September. If you are on a Medicare Advantage plan, your plan's costs may change, and new plans may become available in your area.

You have a chance to review and change your coverage every year during the Annual Enrollment Period, which runs from October 15 to December 7. If you do not actively choose a plan during this window, you stay in your current plan. However, comparing plans each year can reveal lower-cost options or plans with better coverage for your needs. You can use the Medicare Plan Finder tool on Medicare.gov to compare costs side by side and see what you would pay for your current medications and doctors under different plans.

What to ask your doctor and Medicare

Before you have a procedure or test, ask your doctor whether it is covered by Medicare and what your out-of-pocket cost will be. Ask whether the doctor and facility are in your plan's network if you have a Medicare Advantage plan. Request an Advance Beneficiary Notice if your doctor thinks Medicare might not cover a service — this document tells you in advance what you may have to pay.

Call 1-800-MEDICARE if you have questions about your costs, whether a service is covered, or whether you may have access to for cost-reduction programs. You can also speak with a counselor through your State Health Insurance information Program (SHIP), which offers free, unbiased help. Find your state's SHIP by visiting shiptalk.org or calling 1-877-839-2675.

Frequently Asked Questions

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

If you or your spouse worked at least 10 years in jobs where you paid Medicare taxes, you do not pay a Part A premium. You still pay the Part A deductible when you use hospital services. If you did not work that long, you can buy Part A, but the premium depends on your work history — typically $278 to $557 per month.

What happens if I cannot afford my Medicare costs?

Contact your state Medicaid office, your State Health Insurance information Program, or call 1-800-MEDICARE to learn about Extra Help, Medicare Savings Programs, and Medicaid. These programs can cover premiums, deductibles, and copays if your income is low enough. Income limits vary by state and program.

Can I switch plans if my costs go up?

Yes, during the Annual Enrollment Period from October 15 to December 7 each year, you can switch to a different Medicare Advantage plan, add or drop Medigap coverage, or change your Part D plan. Changes take effect January 1. If you have a major life change like losing employer coverage, you may may have access to for a Special Enrollment Period outside these dates.

Why would I choose Original Medicare if Medicare Advantage costs less?

Original Medicare lets you see any doctor or hospital that accepts Medicare, with no network restrictions. Medicare Advantage plans usually limit you to in-network providers and may require referrals. If you travel frequently or have doctors you want to keep, Original Medicare may be worth the higher cost, especially if you add a Medigap plan.

Do my costs stay the same every year?

No. Premiums, deductibles, and copays change every January. Part B premiums can increase significantly if your income rises or if you delayed signing up. Review your coverage each fall during open enrollment to see whether a different plan would cost less or cover your needs better.