Medicare costs break into four parts, and what you pay depends on which parts you choose

Medicare has four separate costs: the monthly premium you pay, the annual deductible you meet before coverage starts, the copayments or coinsurance you pay at the doctor or hospital, and any costs for services Medicare does not cover. In 2024, Part A (hospital insurance) has no monthly premium for most people, but Part B (doctor visits) costs $164.90 per month. Part D (prescription drugs) and Medigap or Medicare Advantage plans add their own premiums on top. The exact amount you pay depends on your income, which plan you choose, and whether you signed up on time.

If you delay signing up for Part B or Part D when you first become may be able to access, Medicare charges a permanent penalty — a percentage increase to your premium for as long as you have that coverage. This penalty does not go away, so understanding the important date matters more than the current dollar amounts.

Key Takeaways

  • Part A (hospital) is free for most people at 65; Part B (doctor visits) costs $164.90 per month in 2024, but the amount changes each year.
  • Part D (prescription drugs) premiums vary by plan and insurer, ranging from roughly $7 to $100 per month depending on which drugs you take.
  • Medigap or Medicare Advantage plans add a second monthly premium on top of Part B, with costs varying widely by plan and location.
  • Delaying Part B or Part D enrollment after you turn 65 triggers a permanent penalty that increases your premium for life.
  • Your income may reduce your Part B and Part D costs through a program called IRMAA, or increase them if your income is high.

Part A and Part B premiums in 2024

Part A (hospital insurance) costs nothing per month for people who worked 40 quarters — roughly 10 years — and paid Medicare taxes. If you did not work that long, you may pay up to $505 per month. Part A also has a deductible: in 2024, you pay $1,676 for each hospital stay, then Medicare covers the rest for the first 60 days. After 60 days, you pay coinsurance ($419 per day for days 61 to 90, and $838 per day for days 91 to 150).

Part B (doctor visits, outpatient care, and medical equipment) costs $164.90 per month in 2024 for most people. If your income was over $97,000 as a single person or $194,000 as a married couple filing jointly in 2022, you pay more — the amount rises in brackets up to $560.50 per month for the highest earners. Part B also has an annual deductible of $240 in 2024. After you meet the deductible, you typically pay 20 percent of the cost for doctor visits and outpatient services.

These amounts change each year. Medicare announces the new premiums and deductibles in the fall, and they take effect January 1. If you are on Social Security, your Part B premium is deducted automatically from your check.

Part D prescription drug costs

Part D premiums vary widely because each insurance company sets its own price for each plan. In 2024, premiums range from roughly $7 to $100 per month depending on the insurer and which drugs are covered. You choose a plan during the annual enrollment period (October 15 to December 7), and the plan you pick determines both your monthly premium and how much you pay when you fill a prescription.

Part D also has a deductible (up to $545 in 2024), a copayment structure, and a coverage gap sometimes called the "donut hole." Once you and your insurer spend $5,850 out of pocket in 2024, you enter the gap and pay more for drugs until your total spending reaches $7,050. After that, catastrophic coverage kicks in and you pay a small copayment for the rest of the year. These dollar amounts change annually.

If you do not sign up for Part D when you first become may be able to access at 65, you pay a penalty of roughly 1 percent of the national average Part D premium for each month you delay. If you wait three years, the penalty is about 3 percent higher than the base premium — and that penalty stays with you permanently.

Medigap and Medicare Advantage premiums

Medigap (supplemental insurance) covers costs that Original Medicare does not — copayments, coinsurance, and deductibles. Medigap premiums in 2024 range from roughly $100 to $300 per month depending on the plan letter (A through N) and your age and location. Medigap is sold by private insurers, so you shop for it separately from Medicare. You have a six-month window starting when you turn 65 and enroll in Part B to buy Medigap without medical underwriting; after that window closes, insurers can deny you or charge more based on your health.

Medicare Advantage (Part C) is an alternative to Original Medicare plus Medigap. It is offered by private insurers and often costs $0 per month in premiums, though some plans charge $50 to $200 monthly. However, Medicare Advantage typically has higher copayments and coinsurance than Original Medicare, and it requires you to use doctors and hospitals in the plan's network. You still pay your Part B premium to Medicare, then the Advantage plan premium to the insurer on top of that.

Income-related costs and IRMAA

If your income is above a certain threshold, you pay more for Part B and Part D through a program called IRMAA (Income-Related Monthly Adjustment Amount). Medicare uses your tax return from two years prior to calculate your income. In 2024, if you filed taxes as a single person and your income was over $97,000, your Part B premium increases. For married couples filing jointly, the threshold is $194,000.

IRMAA has five income brackets, and your Part B premium can rise to as much as $560.50 per month if you are in the highest bracket. Part D premiums also increase by income bracket. If your income drops significantly — because you retired, had a major loss, or experienced a life event — you can ask Medicare to recalculate your IRMAA using your current year's income instead of the two-year-old return.

Out-of-pocket costs beyond premiums

Premiums are only the beginning. Once you are enrolled, you also pay deductibles, copayments, and coinsurance. With Original Medicare (Part A and B), you pay the Part A hospital deductible ($1,676 in 2024) and the Part B deductible ($240 in 2024), then 20 percent coinsurance for most services. If you have Medigap, it covers most or all of these costs depending on the plan. If you have Medicare Advantage, your copayments are typically lower than the 20 percent coinsurance, but you are limited to in-network providers.

Medicare does not cover dental, vision, hearing aids, or long-term care. Some Medicare Advantage plans include dental or vision benefits, but Original Medicare does not. If you need these services, you either pay out of pocket or buy separate coverage.

How to estimate your total 2024 Medicare costs

Start with your Part B premium ($164.90 per month for most people, or higher if your income is above the threshold). Add your Part D premium (check the plans available in your area — the lowest-cost plan may be $7 to $15 per month). If you choose Medigap, add that premium (typically $100 to $300 per month). If you choose Medicare Advantage instead of Medigap, add that premium (often $0, but sometimes $50 to $200).

Then estimate your out-of-pocket costs. With Original Medicare and Medigap, your costs are mostly predictable — you pay the deductibles and then Medigap covers the rest. With Original Medicare alone, you pay 20 percent coinsurance for most services, which can add up quickly if you have a serious illness or hospitalization. With Medicare Advantage, you pay copayments per visit, which may be lower than 20 percent but add up if you see many doctors.

Use the Medicare Plan Finder tool on Medicare.gov to compare plans available in your zip code and see estimated costs for the drugs you take and the doctors you see.

Frequently Asked Questions

Do I have to pay for Part A?

Most people do not pay a monthly premium for Part A if they or their spouse worked and paid Medicare taxes for at least 40 quarters (about 10 years). If you did not work that long, you may pay up to $505 per month. You still pay the hospital deductible ($1,676 in 2024) when you are admitted.

What happens if I miss the Part B or Part D enrollment important date?

If you do not sign up for Part B when you turn 65, you pay a permanent penalty of 10 percent of the Part B premium for each year you delay. For Part D, the penalty is roughly 1 percent of the national average premium per month of delay. These penalties stay with you for life, so signing up on time is important even if you do not need coverage when ready.

Can I change my Part D plan if the costs go up?

Yes. You can switch Part D plans during the annual enrollment period (October 15 to December 7) each year. You can also switch if you have a life event like losing employer coverage or moving to a new state. Outside these windows, you are locked into your plan for the year.

Does Medicare cover my prescriptions if I cannot afford them?

If you have low income and limited resources, you may may have access to for Extra Help, a federal program that pays Part D premiums and reduces your copayments. You can explore through Social Security or your state Medicaid office. Some drug manufacturers also offer patient information programs that provide free or reduced-cost medications.

What is the difference between what I pay with Medigap versus Medicare Advantage?

With Medigap, you pay a higher monthly premium but lower out-of-pocket costs at the doctor — Medigap covers most copayments and coinsurance. With Medicare Advantage, you pay a lower or zero premium but higher copayments per visit and must use in-network doctors. Medicare Advantage is cheaper if you are healthy; Medigap is cheaper if you see many doctors or have chronic conditions.