Important: The specific dollar amounts for Medicare premiums, deductibles, and IRMAA brackets are updated every year by CMS. For the most current figures, always confirm at Medicare.gov/your-medicare-costs or in the latest Medicare & You handbook. The framework below explains how the costs are structured.
Part A: hospital insurance
Most people pay $0 monthly premium for Part A if they (or a spouse) paid Medicare taxes for at least 10 years of work (40 quarters). If you didn't reach 40 quarters, you can buy Part A at a monthly premium that varies based on how many quarters you did pay.
Even with premium-free Part A, you still owe:
- Inpatient hospital deductible: paid per benefit period (a new benefit period starts after 60 consecutive days without inpatient care)
- Daily coinsurance: for hospital stays beyond 60 days, and for skilled nursing facility stays beyond 20 days
Part B: medical insurance
Part B has a standard monthly premium, set by CMS each year. Higher-income beneficiaries pay more under IRMAA rules (see below).
Once you meet the annual Part B deductible, you typically pay 20% coinsurance for most Medicare-covered services. There is no annual out-of-pocket maximum on Original Medicare alone, which is why most people add a Medicare Advantage plan or a Medigap policy.
IRMAA: higher Part B and Part D premiums for higher incomes
IRMAA stands for Income-Related Monthly Adjustment Amount. It's an added cost on top of your standard Part B and Part D premiums if your modified adjusted gross income (MAGI) exceeds certain thresholds. Social Security uses your tax return from two years prior to calculate IRMAA.
IRMAA is structured as a series of brackets, the higher your MAGI, the higher the surcharge. The thresholds adjust each year. If your income has dropped recently (because of retirement, a job loss, divorce, or a spouse's death), you can ask Social Security to recalculate by filing form SSA-44.
Medicare Advantage costs
A Medicare Advantage plan premium is separate from (and on top of) your Part B premium. Many plans have a $0 monthly plan premium , but you still owe Part B.
With Medicare Advantage you also pay copays or coinsurance at the point of service: a flat $20 for a primary care visit, $40 for a specialist, a percentage for a hospital stay, etc. The exact numbers vary by plan and are published in the plan's Summary of Benefits.
Medicare Advantage plans have an annual out-of-pocket maximum for in-network covered services, once you hit it, the plan pays 100% for the rest of the year. CMS sets a federal maximum each year; most plans set theirs lower.
Medigap costs
Medigap (Medicare Supplement) premiums vary by:
- The lettered plan you choose (Plan G typically costs more than Plan N)
- Your age (in most states)
- Your ZIP code
- Whether you use tobacco (in some states)
- The insurance company
Because Medigap benefits are federally standardized, comparing prices for the same lettered plan across carriers is one of the easiest ways to save. The same Plan G can vary by hundreds of dollars a year between insurers.
Part D drug coverage costs
Part D plans have:
- A monthly premium (varies by plan)
- A deductible (some plans are $0)
- Copays or coinsurance per prescription, based on tier
- An annual out-of-pocket cap, $2,000 starting in 2025, indexed for inflation in future years
See our Part D prescription guide for more on formularies, pharmacy networks, and the late-enrollment penalty.
Programs that lower Medicare costs
If you have limited income or resources, federal and state programs can help:
- Medicare Savings Programs: state-run programs that help pay your Part B premium and sometimes other costs
- Extra Help (Low-Income Subsidy): federal program that lowers Part D premiums, deductibles, and copays. See our Extra Help guide.
- Medicaid: if you qualify for both Medicare and Medicaid, Medicaid covers many costs Medicare doesn't
The right cost question to ask
The most useful question isn't "how much does Medicare cost?", it's "how much will I pay for the care I actually use?"
A heavy healthcare user with a low Medicare Advantage premium can spend significantly more in a year than someone on Medigap who pays a higher monthly premium but has minimal out-of-pocket costs at the point of service. The right plan is the one with the lowest total annual cost for your specific doctors, prescriptions, and care patterns.