Medicare Costs

What You'll Find Here

Understanding Medicare costs requires familiarity with key terms and definitions, as well as the complex cost structure and types of expenses that beneficiaries must navigate across different plan options.

We’ll break down the various terms, cost components, and how they interact across different Medicare plans so you can make more informed decisions about your healthcare coverage.

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Deductibles - The annual amounts you pay before Medicare kicks in
Coinsurance - The percentage of costs the beneficiary is responsible for paying, e.g., 20%
Copays - Set fees that beneficiaries pay for specific healthcare services
Premiums - A Medicare premium is the regular monthly fee that seniors pay for their Medicare insurance. It’s the cost of the insurance policy, separate from deductibles, coinsurance, and other out-of-pocket expenses.
Max Out of Pocket (MOOP) - MOOP, or Maximum Out-of-Pocket, is the highest amount a person with a Medicare Advantage (Part C) plan will pay for covered healthcare costs in a given year. Once the limit is reached, the plan will cover 100% of the remaining expenses for the remainder of the year. The MOOP includes deductibles, copayments, and coinsurance for covered Part A and Part B services within the plan's network. The MOOP does not include monthly premiums, prescription drug costs (Part D), or costs for services outside the plan's network.
Balance Billing - The additional amount a Non-Participating (Non-PAR) Provider may charge beyond the Medicare-approved rate, which the beneficiary is responsible for paying.

What you need to know:

Most people get this FREE if they or their spouse worked and paid Medicare taxes for 10+ years, but the deductible for 2025 is $1676, with a 20% coinsurance for most services
Automatic enrollment at age 65 if you're already getting Social Security
No monthly premium for most people, but you do pay deductibles and coinsurance when you use services
This alone isn't enough healthcare coverage - it doesn't cover doctor visits, prescriptions, or preventive care

Not all Medicare plans include these types of cost-sharing. Cost structures vary across different Medicare parts and supplement plans. The following list provides general guidance on what to expect. However, always review your plan documents for complete details.

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Average Medicare Costs

Part A:

Premium-free Part A if Medicare taxes are paid for at least 10 years
If not, premium up to $518
$1676 deductible
Coinsurance varies based on days
No max out of pocket

Part B:

$185 standard monthly premium
$240 annual deductible
20% (of Medicare-approved costs) coinsurance after deductible
No max out of pocket

Part C:

Premiums vary by plan
Deductibles and copays are set by the plan (Medicare Parts A & B deductibles do not apply)
Extra benefits are included for an additional premium
Some plans include Rx coverage
Max out-of-pocket limits apply

Part D:

Premium varies by plan
Deductible cannot exceed $590
Coinsurance & copays set by the plan
$2000 out-of-pocket max

Medigap:

Helps cover the Medicare Part A deductible
Coverage for the Medicare Part B deductible is not available to new enrollees after 1/1/2020
Premiums vary by provider and location
Most comprehensive plans have the highest deductibles
10 plans to choose from (2 are sunsetting)

Important: Original Medicare (Parts A and B) has no annual limit on out-of-pocket costs; therefore, many people opt for supplemental coverage.

This information is based on currently available Medicare data and is subject to change. Find more details on Medicare.gov or call 1-800-MEDICARE for the most current information.