Medicare health insurance costs, like costs associated with any type of insurance, vary widely. Like other insurance plans, Medicare plans use out-of-pocket fees like annual deductibles, copays, and coinsurance fees, in addition to monthly premiums. Some of these costs will be more regular than others, and some may only arise once in a while. Understanding the scheduling is also important, as Part A and Part B don’t use the same type of benefit period, meaning that out-of-pocket costs come at different frequencies.

We’ll go over all of the types of costs associated with every type of Medicare, so you can know what you can expect to pay. Monthly costs can vary from person to person even on the same plan, as some people may have to pay a coinsurance one month when another didn’t require any care. However, these costs should help you understand what to expect if you know the details of your situation.

The four types of Medicare costs

Before we get into the details for each part of Medicare, it will be useful to understand the types of costs that you can incur as a Medicare beneficiary. Medicare plans have four types of possible costs. These are:

• Premiums
• Deductibles
• Coinsurance/Copay
• Late enrollment fees

Let’s take a look at these one by one, and see how they apply to each part of Medicare.

Medicare premiums

Premiums are the costs that you will pay to your insurance company each month. These will not vary from month to month. There are standard rates that you’ll pay for Original Medicare, while private Medicare plans can vary more widely.

Part A

For most people, Medicare Part A is available in a premium-free version, where you pay no premiums at all each month. This is based on how long you or your spouse have paid the Medicare tax. Once you have paid this tax for 40 quarters (10 years) then you’ll be eligible for premium-free Part A.

If you or your spouse have paid the Medicare tax for 30-39 quarters, then your monthly premium for Part A will be $278 in 2024. For those who have paid the Medicare tax for under 30 quarters, the premium cost will come to $505 each month.

Medicare Part B premiums

The Part B standard premium for 2024 is $174.40. However, you may have to pay more, depending on your income. Fewer than 5% of Medicare beneficiaries owe the IRMAA surcharge. The chart below lists the IRMAA surcharge for both Part B and Part D.

Part C (Medicare Advantage) premiums

Medicare Advantage health plans, also known as Part C plans, have premiums that function in a slightly different way from Original Medicare (Medicare Parts A and B). Medicare Part C is offered by private insurance companies, rather than the federal government. For this reason, the premiums can vary, while Original Medicare premiums are standard.

In general, you can expect Original Medicare to have slightly higher premiums than Medicare Advantage, while Part C plans have higher deductibles. However, this is just a general trend and not a rule. There are some Part C plans that have a $0 premium, with high deductibles and coinsurance amounts associated with them.

In order to find the premium for a Part C plan, you’ll have to get a quote. Or, you can use our Find a Plan tool to scroll through the plan options in your area. It's super easy - just enter your zip code and any medications you take to start comparing Part C plans.

Medicare Part D prescription drug plans

Like Part C plans, Part D plans are also offered by private insurance companies. Part D plans offer prescription drug coverage, and you can purchase them if you have Original Medicare or a Medicare Advantage plan that doesn’t cover prescription drugs.

Like Part C, Part D premiums will vary, and you will have to get a quote to check the price. However, Part D plans also have something known as the “Income-Related Monthly Adjustment Amount”, or IRMAA. This is an amount that you will pay to the federal government each month in addition to your monthly premium, depending on your income.

See the chart above to see what surcharge you owe for Part D if you're a high-earner.

Medicare deductibles: What to expect

A deductible is simply an amount that you must pay out-of-pocket before your insurance will begin to provide you with coverage. Let’s take a look at the deductibles for each part of Medicare.

Part A deductibles

Part A has a deductible of $1,632 per benefit period. For most insurance plans, a benefit period is simply a year, but Part A is a bit different. A Part A benefit period begins when you are first admitted to a hospital stay, and ends after you haven’t been an inpatient for 60 days. This means it’s possible to have to meet more than one Part A deductible per year. After you meet the deductible in each benefit period, Medicare coverage will begin.

Part B deductibles

There’s not much to say about the Part B deductible. It comes to $240 in 2024, and you will have to pay it fully before your Medicare benefits begin.

Part C deductibles

As you can expect, Medicare Advantage deductibles will vary depending on your plan. Some plans will have very high deductibles and low premiums, while some will be the reverse. There’s simply no way to tell without checking the details of your plan.

Medicare Part D deductibles

Although Part D deductibles will vary because they are offered by private plans, they can’t be higher than $545 per year in 2024, although they can be less.

Coinsurance and copays for Medicare: What to expect

When it comes to this area of cost-sharing, coinsurance usually refers to a percentage-based fee, while copayment or copay refers to a fixed fee that you pay with each visit. The usage is slightly different for some parts of Medicare; let’s take a look at the details.

Part A coinsurance

Medicare Part A only requires a coinsurance for days 60+ of your inpatient stay during a given benefit period. This amounts to $408 per day for days 61-90, and $816 for days 90 and beyond for every lifetime reserve day.

Lifetime reserve days don't reset during each new benefit period, and each beneficiary receives 60 in total. After the lifetime reserve days have been used, you must pay the full cost of your inpatient care until a new benefit period begins, for days 90+ of that benefit period.

You may notice that although this is a fixed fee, Medicare refers to it as a coinsurance, rather than a copayment.

Part B coinsurance: Percentage-based

The Part B coinsurance is fairly simple to understand. Basically, Medicare will pay for 80% of your medically-necessary services, and you will pay the remaining 20% of the Medicare-approved cost after your deductible has been met. There may be some services that Medicare covers in full, but generally speaking, you should expect to pay this 20% cost.

Note that in addition to outpatient care, Part B covers durable medical equipment (DME) meaning the Part B coinsurance will apply.

Part C coinsurance fees

Like the other areas here, the Part C coinsurance will vary and you’ll have to check with your plan to see what the details are for you. Part C may have a more complex cost-sharing system in place, so you may have both coinsurance and copay fees depending on what type of medical care you are receiving.

Part D coinsurance and copays

Part D plans, as you may have guessed, will also vary. However, you can expect Part D plans to use a copay where you pay a fixed fee every time you have your prescription filled. Part D plans will also have a formulary or drug list, which tells you which copay you have to pay depending on which prescription you have filled. Before you choose a Part D plan, make sure to take a look at the formulary to double-check that the drugs you need are affordable for your budget.

Late enrollment penalties for Original Medicare

Finally, let’s take a look at late enrollment penalties for Original Medicare. These are fees that you will have to pay if you don’t enroll in Original Medicare at the proper time, during the relevant enrollment period. Enrollment details vary for each person, so make sure to explore this in more detail.

Part A late enrollment penalty

The Part A late enrollment penalty adds 10 percent to your monthly premium cost for double the number of years that you could have had Medicare but didn’t. So, if you could have enrolled in October 2021, but waited until December of 2023, you will have a 10% increase to your premiums that lasts for 4 years.

Part B late penalties: Avoid at all costs!

The Part B late penalty is far more severe than the penalty for Part A because, for most people, it never goes away. For Part B, you’ll pay a 10% increase in your premiums for every 12-month period you could have had Part B but didn’t. This means that if you don’t have Part B for two years when you could have enrolled, your premiums will go up by 20% (30% for three years, etc.).

The worst part is that this 20% will stay with you; the late enrollment penalty doesn’t go away. For this reason, it’s best to make sure you avoid it. There are some situations that allow you to defer coverage without incurring this extra fee. For example, if you are covered by your employer when you turn 65 AND there are more than 20 employees at your workplace, you can delay Part B enrollment without penalty. Make sure to check the details so you don’t experience any unhappy surprises. And it's always a good idea to talk to your benefits administrator if you're still employed when you qualify for Medicare. They can help you understand your options and whether your work plan qualifies as credible coverage by Medicare.

Additional resources

• ClearMatch Medicare: Find a Medicare Plan
• Medicare.gov: Costs