Medicare health insurance covers Americans 65 and older with specific disabilities and health conditions. Many people assume that Medicare has no cost, as they have been paying Medicare taxes for years. However, there are costs associated with Medicare, and we’ll discuss different costs that vary depending on your coverage and situation.

The basics of Medicare costs

Medicare isn’t a one-size-fits-all situation, as everyone’s needs are different. Some people will prefer to stay on Orignal Medicare. Others may want to add a Medicare Supplement and Part D plans, while some beneficiaries may want a Medicare Advantage program. The one thing in common is regardless of which option you choose, they don’t replace you Original Medicare premiums.

Medicare’s 4 parts have different costs associated with them. While most people pay the standard costs, individuals with larger incomes may have to pay an income-related monthly adjusted amount or IRMAA.

Medicare Part A

For most Americans, Medicare Part A will have no costs, as they or their spouses have paid Medicare taxes for at least 10 years. Medicare Part A has a standard premium of $505 for Americans who paid Medicare taxes for less than 30 quarters and a premium of $278 for those between 30 and 40 quarters in their lifetime. Beneficiaries who met the 40-quarter requirement through their or their spouse’s work will receive Medicare Part A at no monthly cost.

In addition to the premiums, costs are associated with using Medicare Part A benefits and services. Part A costs include:

  • Recurring deductible – $1,632
  • Inpatient hospital for days 61-90 – [GCBB#part-a-inpatient-coinsurance-days-61-90]
  • Inpatient hospital for days 91-120 – [GCBB#part-a-inpatient-coinsurance-days-91-120]
  • Inpatient skilled nursing facility days 21-100 – [GCBB#part-a-snf-copay-days-21-100]

Medicare Part B

Most Medicare beneficiaries will pay a standard Medicare Part B premium of $174.70. While most Americans will pay this standard premium, those with low income, could qualify for a Medicare Savings Program that pays the premium for them. In addition, Americans with higher incomes pay Medicare Part B IRMAA premiums.

Part B IRMAA chart

The Income Related Monthly Adjustment Amount is based on your income from two years prior.

Beneficiaries who file individual tax returns with modified adjusted gross income: Beneficiaries who file joint tax returns with modified adjusted gross income: Income-Related Monthly Adjustment Amount Total Monthly Premium Amount in 2023
$97,000 or less $194,000 or less $0.00 $164.90
$97,000 to $123,000 $194,000 to $246,000 $65.90 $230.80
$123,000 to $153,000 $246,000 to $306,000 $164.80 $329.70
$153,000 to $183,000 $306,000 to $366,000 $263.70 $428.60
$183,000 to $500,000 $366,000 to $750,000 $362.60 $527.50
$500,000 or above $750,000 or above $395.60 $560.50

In addition to the Medicare Part B premium, beneficiaries of Medicare Part B are responsible for the following cost-sharing.

  • Annual deductible – $240
  • Part B Coinsurance – 20% of the Medicare-approved amount
  • Part B Excess charges – 15% over the Medicare-approved amount

Medicare Part A and B coverage chart

Medicare Part A (Hospital Coverage)

  • Inpatient care in hospitals
  • Skilled nursing facility care
  • Hospice care
  • Home health care
Medicare Part B (Medical Insurance)

  • Services from doctors and health providers
  • Outpatient care
  • Home health care
  • Durable medical equipment
  • Some preventive services

Medicare Part C

Part C is also called Medicare Advantage. Private companies contracted by Medicare provide these plans. They must cover at least the same items and services covered by Medicare Part A and B, and in many cases, Medicare prescription drug coverage. They also can include over-the-counter benefits, and additional coverage and services, like transportation, gym memberships, and dental coverages that aren’t included in Original Medicare.

Medicare Advantage plans have their cost-sharing. The premiums, copays, deductibles, and coinsurance amounts will vary depending on your chosen plan, location, and insurance carrier. Im many areas these Part C plans will have low to no premium.

Medicare Part D

Medicare Part D is the prescription drug coverage for Medicare. Like Medicare Advantage, private companies contracted with Medicare offer these plans. These plans must be as good or better than the Centers for Medicare and Medicaid Services’ standard model. The average Medicare Part D premium is $31.50. Like Medicare Part B, there is an IRMAA for the Medicare Part D premiums.

Medicare Part D IRMAA

The Income Related Monthly Adjustment Amount is based on your income from two years prior.

Beneficiaries who file individual tax returns with modified adjusted gross income: Beneficiaries who file joint tax returns with modified adjusted gross income: Income-related monthly adjustment amount for 2023
Less than or equal to $97,000 Less than or equal to $194,000 $0.00
Greater than $97,000 and less than or equal to $123,000 Greater than $194,000 and less than or equal to $246,000 $12.20 + Plan Premium
Greater than $123,000 and less than or equal to $153,000 Greater than $246,000 and less than or equal to $306,000 $31.50 + Plan Premium
Greater than $183,000 and less than $500,000 Greater than $366,000 and less than $750,000 $70 + Plan Premium
$114,000 to $1Greater than or equal to $500,000 Greater than or equal to $750,000 $76.40 + Plan Premium

Medicare Supplement

Medigap or Medicare Supplement plans add insurance to Original Medicare to help cover the cost-sharing amounts left over to the beneficiary. They have higher monthly premiums and have ten plan options to choose from with varying levels of coverage. The great thing about this additional coverage is that it allows all the freedoms as keeping Original Medicare, with the highest levels of cost-sharing protection.

Medicare Supplement plan chart

Medicare cost FAQs

How is Medicare Part B cost calculated?

The adjustment hinges on the adjusted gross income (AGI) you reported on your tax return from two years ago. Your modified adjusted gross income (MAGI) is computed by adding your AGI to any supplementary income you may have. Most beneficiaries will pay the standard premium.

What is the out-of-pocket maximum for Medicare?

Original Medicare doesn’t have a maximum out-of-pocket. In essence, your bills can continue rising without any stop in sight. However, enrolling in a Medicare Advantage, or Medicare Supplement plan can assist and limit the amount you’d be responsible for paying.

Which part of Medicare is usually free of cost?

Most Medicare beneficiaries will not have to pay for Medicare Part A. Some areas may have Medicare Advantage plans with no additional cost.

What are the four parts of Medicare, and what do they pay for?

Part A delivers hospital and inpatient care coverage, while Part B offers coverage for outpatient and medical services. Part C presents an alternative approach to accessing Medicare benefits (see below for details), and Part D ensures prescription drug coverage.

Why do doctors not like Medicare Advantage plans?

Most physicians are cautious about Medicare Advantage as these plans shift patients’ financial risk to the doctor. Medicare Advantage plan providers typically offer an upfront payment to the doctor based on the patient’s diagnosis.

Find a Medicare plan to help with Medicare costs

With so many options, medicare costs can be confusing and complicated, but we’re here to help. Simply fill out our online request form, and we can compare the top companies and connect you with an expert in your area to assist you with helping you find the plan and options to fit your needs and situation best. Don’t delay. Get help today!!!

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Written By:
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Lindsay Malzone, Lindsay Malzone is the Medicare editor for She's been contributing to many well-known publications since 2017. Her passion is educating Medicare beneficiaries on all their supplemental Medicare options so they can make an informed decision on their healthcare coverage.
Reviewed By:
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Rodolfo Marrero, Rodolfo Marrero is one of the co-founders at He has been helping consumers find the right coverage since the site was founded in 2013. Rodolfo is a licensed insurance agent that works hand-in-hand with the team to ensure the accuracy of the content.