Medicare costs vary by which parts you choose and which insurance company you pick

Medicare has four parts, and each one costs money differently. Part A (hospital insurance) has no monthly premium for most people, but you pay a deductible when you go to the hospital. Part B (doctor visits and outpatient care) costs a monthly premium that changes each year — in 2024 it was $164.90 per month for most people, though higher earners pay more. Part D (prescription drugs) premiums vary by plan, usually between $7 and $100 per month. Part C (Medicare Advantage) is an alternative to A and B offered by private insurers, with its own premiums and deductibles that differ by company and plan.

Your actual out-of-pocket costs depend on how much medical care you use and which specific plan you choose. Someone who rarely sees a doctor pays mainly premiums. Someone with chronic conditions pays premiums plus deductibles, copayments, and coinsurance. The government sets the rules for what Medicare covers, but private insurers set the prices for their Part C and Part D plans, so two people on Medicare can pay very different amounts for the same services.

Key Takeaways

  • Part B premiums are set by Medicare and increase each year; in 2024 most people paid $164.90 monthly, but higher earners pay more.
  • Part A has no monthly premium for most people, but you pay a deductible ($1,632 in 2024) if you are hospitalized.
  • Part D (drug coverage) premiums range widely by plan and insurer, usually $7 to $100 per month.
  • Part C (Medicare Advantage) plans offered by private insurers have their own premiums and deductibles, often lower than Original Medicare but with network restrictions.
  • Your total cost depends on which parts you choose, which plan you pick, and how much care you actually use.

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 pay no monthly premium for Part A. If you did not work long enough, you can buy Part A, but the premium is high — in 2024 it was $278 per month for partial coverage or $505 per month for full coverage.

The real cost of Part A comes when you use it. In 2024, if you go to the hospital, you pay a deductible of $1,632 for the first 60 days of a hospital stay. If you stay longer, you pay coinsurance (a daily amount) for days 61 through 90, and even more for days beyond that. Skilled nursing facility care has its own deductible and coinsurance structure. These amounts change each year.

Part B: Doctor Visits and Outpatient Care

Part B covers doctor office visits, outpatient surgery, diagnostic tests, and preventive care. Everyone on Medicare pays a monthly premium for Part B. In 2024, the standard premium was $164.90 per month, but if your income is above a certain threshold, you pay a higher amount — the surcharge can be $25 to $82 extra per month depending on your income level. These income thresholds and premiums change annually.

Beyond the premium, you also pay a yearly deductible ($240 in 2024) before Medicare starts to pay. After you meet the deductible, you typically pay 20 percent coinsurance for most services, meaning Medicare pays 80 percent. For some preventive services like cancer screenings and vaccines, you pay nothing after you meet the deductible. The 20 percent coinsurance has no annual cap, so costs can add up if you have many doctor visits or expensive procedures.

Part D: Prescription Drug Coverage

Part D is optional coverage for prescription medications. If you do not sign up when you first become may be able to access for Medicare and later decide you want it, you may pay a permanent penalty on top of your premium. The monthly premium varies widely by plan and insurance company — it can range from about $7 to $100 or more per month, and plans change their premiums and formularies (the list of drugs they cover) each year.

You also pay out-of-pocket costs when you fill prescriptions. Most plans have a deductible (up to $545 in 2024), then you pay a copayment or coinsurance until you reach a certain spending threshold. After that, you enter the "donut hole," where you pay a higher percentage of drug costs until your total spending reaches a cap. Once you hit the cap, you pay only a small copayment for the rest of the year. The exact amounts depend on your plan and the drugs you take.

Part C: Medicare Advantage Plans

Part C (Medicare Advantage) is an alternative to Original Medicare (Parts A and B). Private insurance companies offer these plans, and they must cover everything Original Medicare covers, but they can charge different premiums and deductibles. Some Part C plans have no monthly premium beyond what you pay for Part B, while others charge $50 to $200 or more per month. Deductibles and copayments also vary by plan.

The trade-off is that Part C plans usually have a network — you must use doctors and hospitals in the plan's network, or pay more. Many Part C plans include Part D drug coverage built in, so you do not buy it separately. Because insurers set their own prices, two Part C plans in the same area can cost very differently. You can compare plans during the annual enrollment period (October 15 to December 7) to find the one that fits your doctors and budget.

Medigap: Supplemental Coverage to Reduce Out-of-Pocket Costs

Medigap is supplemental insurance sold by private companies that works alongside Original Medicare (Parts A and B). It covers some of the costs that Medicare does not — deductibles, coinsurance, and copayments. If you choose Original Medicare, you can buy a Medigap policy to reduce what you pay out of pocket, but Medigap has its own monthly premium, usually $100 to $300 per month depending on the plan and your age.

Medigap plans are standardized by the government, so Plan G from one insurer covers the same things as Plan G from another — the difference is price. You cannot use Medigap and Part C at the same time; you choose either Original Medicare with Medigap, or Part C. The choice depends on your health, your doctors, and how much you want to spend on premiums versus out-of-pocket costs.

Income-Related Premiums and Extra Help

If your income is above a certain level, you pay higher premiums for Part B and Part D. These are called Income-Related Monthly Adjustment Amounts (IRMAA). The income thresholds and surcharge amounts change each year. For 2024, if you are single and earned more than $97,000 in 2022 (the income year used for 2024 premiums), you pay extra. Married couples filing jointly with income above $194,000 also pay extra.

If your income is low, you may be able to get help paying premiums and out-of-pocket costs through Extra Help (for Part D) or Medicaid (which varies by state). You can also get help with Part B premiums through your state's Medicaid program if you may have access to. These programs have their own income limits, which are higher than the IRMAA thresholds.

Frequently Asked Questions

Does Medicare cost the same for everyone?

No. Part B premiums are the same for most people, but higher earners pay surcharges. Part C and Part D premiums vary by plan and insurer. Your total cost also depends on how much care you use and which plan you choose. Two people on Medicare can pay very different amounts.

What if I cannot afford Medicare premiums?

If your income is low, you may be able to get help through Extra Help (for Part D), Medicaid (which varies by state), or your state's Part B premium information program. Contact your local Medicaid office or call 1-800-MEDICARE to find out what you might be able to get.

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 10 years. If you did not work long enough, you can buy Part A, but the premium is high. You still pay a deductible and coinsurance when you use hospital services.

Can I change my plan if costs are too high?

Yes. You can change Part C or Part D plans during the annual enrollment period (October 15 to December 7 each year). If you have a life event like losing other insurance or moving, you may be able to change plans outside the enrollment period. Call 1-800-MEDICARE to ask about your situation.

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

You may have to pay a permanent penalty on your Part D premium if you go without creditable drug coverage and later sign up. The penalty is about 1 percent of the national average Part D premium for each month you were not covered. This penalty stays with you for as long as you have Part D.