What Does Medicare Cost?

Medicare is a health insurance program for people 65 and older. People younger than 65 who are disabled or who have end-stage kidney disease or ALS can also get health care through Medicare.

What you pay for Medicare depends on how much you earn each year and how much care you need. You pay a separate amount for each part of Medicare.

Medicare Part A

Part A is your hospital coverage.

Premium costs. If you or your spouse worked for at least 10 years and paid Medicare taxes, you won't pay any monthly fee, called a premium, for Part A. Most people don’t pay a premium.

If you or your spouse paid Medicare taxes for less than 10 years total, you will have to pay a monthly fee for Part A coverage. 

Deductible costs. If you stay overnight in the hospital or use other Part A services, you'll pay a deductible. The deductible is the amount you must pay before Medicare pays anything for your care.

For 2021, the deductible for each hospital stay is $1,484.

Copay costs. You also pay copays for Part A. It's a set amount you pay for specific types of care. If you're in the hospital for more than 60 days, your copay is $371 a day for days 61 to 90. After that, your copay is $742 a day.

Medicare Part B

Part B is for your doctor visits, tests, and other services.

Premium costs: Each month you pay a premium of $148.50. If your income is higher than $85,000, you have to pay a higher premium. How much you make determines how much you pay, ranging from $189.60 to $460.50.

Deductible costs: You also pay a $185 deductible each year. After you pay it, you pay coinsurance, which is 20% of your medical costs.

Penalties: If you don't sign up for Part B when you first become eligible, you may have to pay a penalty if you did not have health insurance through an employer or union. The penalty is an additional 10% of the Part B premium for each 12-month period you did not enroll.



Medicare Part D

Part D plans are sold by private insurance companies, overseen by Medicare, and provide prescription drug coverage.

Premium costs. The monthly fee you pay varies by the plan you choose. The average premium for 2021 is $43. If you have a higher income, you may pay more each month. If your income is low, you can get help with your prescription drug costs through the Extra Help program. If your income is over $88,000 you will pay your plan premium plus an additional fee, ranging from $12.30 to $77.40, depending on your income.

Deductible costs: Each year you pay a deductible before Medicare starts sharing the cost for your medicines. Although the deductible may vary from plan to plan, no plan may charge more than $445 in 2021.

After you've paid the deductible, your Medicare prescription drug plan kicks in and you pay a copay or coinsurance.

Out-of-pocket costs: The part you pay for your medicines is either called a copay or coinsurance. The amount depends on the plan you've chosen. You may pay more for some drugs than others, such as brand-name drugs.

Costs in the donut hole: If you and your drug plan spend a certain amount on medicines, you'll have a gap in your drug coverage, which is often called the donut hole. In 2021, once you and your drug plan have spent $4,130 on covered drugs, you are in the donut hole.5

While in the donut hole, in 2021 you will pay 25% of the cost for a brand-name and generic medications. Although you only pay 25% of the cost of a brand-name drug, 95% of the cost is added to the maximum spending limit. That's a bonus because you only pay a discounted price for a brand-name drug, but you get "credit" for a larger amount. That means you'll reach the maximum more quickly, when “catastrophic coverage” kicks in and Medicare will pay a much larger share of your prescription drugs.

Unlike brand-name drugs, only the amount you pay  for generic drugs counts towards getting you to catastrophic coverage.

Costs after the donut hole: Once you’ve spent $6,550 in out-of-pocket costs in 2021, you are out of the coverage gap. When Medicare starts paying again, it's called catastrophic coverage. Then, you only have to pay a small coinsurance toward your prescription drug costs for the rest of the year. For 2021, this coinsurance is 5% of the cost of the drug. 


Medicare Advantage (Part C)

These are health plans sold by insurance companies but overseen by Medicare. They are alternatives to original Medicare, and usually offer more services than original Medicare. Medicare Advantage plans typically cover hospitalization (Part A), outpatient care (Part B), and prescription drugs (Part D) under one plan.

To qualify for Medicare Advantage, you need to have Medicare Parts A and B. So that means you'll at least need to pay the Part B monthly premium.

On top of the Part B fee, you may need to pay a monthly premium for the Medicare Advantage plan itself. The prices vary a great deal depending on the plan you've chosen and where you live.

If you enroll in a Medicare Advantage plan you must see only the providers in the plan's network and follow the plan’s rules, such as getting a referral to see a specialist.


This is supplemental health insurance provided by private insurance companies that covers some of the costs Medicare doesn't, including copaysand deductibles. You don't need, nor can you buy, a Medicare Advantage Plan if you carry a Medigap policy.

To join a private Medigap plan, you pay a monthly fee to an insurance company in addition to the premium you pay to the government for Medicare Part B.

The costs of Medigap plans vary a lot, depending on the coverage, the company, your location, and your age. So make sure to shop around before buying one. If you wish to buy a Medigap policy, you should do so when you first become eligible for Medicare. Outside of the six month open enrollment period, which starts the month you turn 65, you’re not guaranteed to qualify for a policy.

Medigap options can vary from state to state. 

Getting Help

Medicare can be confusing, but the good news is that there is free help in every state to answer your questions. The State Health Insurance Assistance Program provides trained counselors who offer unbiased advice and counseling on all your Medicare needs. Go to the State Health Insurance Assistance Program website of call 800-MEDICARE to find yours.

WebMD Medical Reference Reviewed by Sarah Goodell on July 22, 2021



USA Today: "Medicare Premiums to Remain Stable in 2014."

Centers for Medicare & Medicaid Services: "More Savings in the Drug Coverage Gap Coming Through 2020," "Get help with your Medicare Costs," "Medicare Savings Programs," "4 Programs That Can Help You Pay Your Medical Expenses," "Medicare and You," "Save on Drug Costs," "Part B Costs," "Medicare 2013: Costs at a Glance," "Costs for Medicare Drug Coverage," "How Medicare Advantage Plans Work," "What's Medicare Supplement (MediGap) Insurance?" "CMS Ensures Greater Value for People in Medicare Drug and Health Plans."

Department of Health and Human Services: "Eligibility."

Kaiser Family Foundation: "Filling the Financial Gaps in Medicare Coverage."

Medicare Rights Center: "Find Out If You Qualify," "Program Financial Eligibility Guidelines."

Michigan Department of Community Health: "Medicare Savings Program."

Minnesota Department of Human Services: "People who need help with Medicare costs."

Social Security Administration: "Understanding the Extra Help With Your Medicare Prescription Drug Plan," "Apply online for Extra Help with Medicare prescription drug costs," "Apply for Medicaid."

California Health Advocates: "An Overview: Prescription Drug Coverage."

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