Medicare Costs
What Does Medicare Cost?
Medicare is health insurance, so there are monthly premium costs as well as out-of-pocket costs when you receive medical care. Like any health insurance plan, it is important to understand your fixed and variable costs associated with your care to budget for your upcoming plan year.
Your actual costs will vary based on your income, what plans you select and where you live. Only Part B Medicare has a fixed premium structure that is the same regardless of where you live. All other parts of Medicare, Parts C and D and Medigap, will have different premium and out-of-pocket costs.
To understand what categories your costs will be when enrolled in Medicare, we’ve defined each below.
Premiums – The set amount that you are required to pay out-of-pocket monthly, whether through your checking account or Social Security check, for Medicare Part B, Medicare Advantage (Part C), your Medicare Part D prescription drug plan and/or your Medicare Supplement plan.
Deductibles – The set amount that you are required to pay out-of-pocket for covered services before your insurance plan begins to provide benefits.
Coinsurance/Copayments – The portion of the medical services or prescription drugs that you are responsible to pay. Copayments are fixed dollar amounts; in comparison, coinsurance is calculated as a percentage.
For most, Medicare Part A is premium-free each month because you or your spouse have worked and paid Medicare taxes.
However, if you do not have the required work credits to qualify for premium-free Part A, your cost in 2026 would be as follows:
✓ Less than 30 quarters: $565/ month
✓ 30-39 quarters: $311/ month
✓ 40 or more quarters: premium-free
Deductibles and Copays
When accessing care under Medicare Part A (without a Medicare Supplement or a Medicare Advantage Plan), you will have deductibles and copayments.
For 2026, if hospitalized, there is a $1,736 deductible for a stay lasting up to 60 days. Medicare refers to this hospitalization as a Benefit Period, which is different from an annual deductible.
A Benefit Period starts the day you are admitted as an inpatient in a hospital, and ends when you haven’t received any inpatient hospital care for 60 consecutive days. It is possible to have more than one hospital stay within the same benefit period. Contrary to a benefit period, an annual deductible is a single deductible for the calendar year. An example would be the Medicare Part B deductible.
There are also copays associated with care received under Part A benefits. For example, if you are a resident of a skilled nursing facility, after 20 days there is a daily copay of $217 that lasts until day 100. After day 100, you would be responsible for all costs of your stay.
Hospice Care
Hospice care is covered 100% by Medicare Part A, regardless of your enrollment into a Medicare Advantage or Medicare Supplement plan. If you are diagnosed with terminal illness with a life expectancy of 6 months or less, you would qualify for Hospice.
Hospice would provide benefits to provide comfort during this time. For most services, there are no costs, with the only potential expenses being small copays for pain or symptom medications. If you reside in a facility, such as a nursing home, you may have to pay room and board to get Hospice.
When enrolled in Medicare Part B, you are required to pay a monthly base premium each month, which is $202.90 in 2026.
However, individuals with higher incomes are required to pay a surcharge to this amount to maintain enrollment in Part B. See the section in IRMAA below to learn more.
Part B Deductible
You have a $283 annual deductible in 2026 when utilizing benefits covered by Medicare Part B.
Part B Coinsurance
Once you’ve reached your deductible, you are responsible for 20% of all covered claims with no limit.
Note: To reduce your financial exposure of unlimited claims, you can enroll in a Medicare Supplement or Medicare Advantage plan (Part C).
Medicare Advantage plans, also known as Part C, have out-of-pocket expenses similar to other parts of Medicare. In addition to a monthly premium, your plan will have a combination of copays, coinsurance and deductibles when you use your plan’s benefits.
Note: Regarding total costs of medical care, all Medicare Advantage plans have a maximum out-of-pocket for care that would normally be covered by Medicare Parts A and B. CMS has established a maximum limit for these benefits of $9,250 for 2026.
If you enroll in stand-alone Part D plan (when receiving benefits under Original Medicare), you will incur out-of-pocket costs, which may include premiums, deductibles, copays and coinsurance.
To get an accurate assessment of your costs, Medicare created Plan Finder, where you can enter your prescriptions, your current pharmacy and your zip code to find the plans in your area.
Note: In 2026, there is an actual out-of-pocket maximum of $2,100; so, regardless of your plan enrollment, if you reach the Catastrophic phase having spent $2,100 in drug costs (what you and others pay), you would not be responsible for any additional costs when filling prescriptions.
A Medigap/ Medicare Supplement plan will have a monthly premium associated with your enrollment. Premiums will vary due to factors such as gender, location, plan design and whether or not you are a smoker.
It is important to again reinforce that all Medicare Supplement plans are standardized, meaning all plans of the same letter cover the same benefits. Therefore, when shopping for a Medicare Supplement plan, premium cost is an important part of the decision-making process.
Note: As of 2020, all plans require you to pay the Part B deductible before a Medicare Supplement plan can provide benefits. The Medicare Part B annual deductible in 2026 is $283.
IRMAA and Medicare Parts B and D
Medicare has implemented a policy where your Part B and Part D premium can be increased based on your modified, adjusted household gross income (MAGI) on your tax return from two years prior. This increase is called Income Related Monthly Adjustment Amount (IRMAA).
IRMAA began in 2006 to help stabilize the funding for Medicare Part B. In 2011, Part D was added to the IRMAA surcharge calculations. Today about 8% of all Medicare eligibles are impacted by IRMAA.
As an example, in 2026, if your Modified Adjusted Gross Income from 2024 was over $109k single or $218k married, you would have to pay a higher amount each month for Part B and D.
These payments can be appealed if your income in 2026 is lower than in 2024 due to life events such as retirement, work reduction or divorce.
Finally, when enrolling in a Medicare Advantage, Medicare Part D or Medicare Supplement plan, these premiums are NOT impacted by your income.
To better understand how your income can impact your Part B and Part D premiums, download our IRMAA Overview below.
RMAA Calculator
Your 2026 Medicare premium estimate
This is an estimate based on the official 2026 CMS IRMAA brackets and the income you entered. Your actual premium is set by Social Security/CMS and can change if your income is reassessed.
Download our IRMAA Overview today.
Appealing IRMAA
If you’ve experienced a life-changing event, such as work-reduction or retirement, that will reduce your income in the current Medicare plan year, you can appeal your IRMAA payment.
You can appeal the decision by submitting a completed SSA-44 form, which is a written request for reconsideration. This form must be submitted within 60 days of the date on the IRMAA notice. To complete the appeal process, you will need to provide evidence that your income has decreased or that the information used to calculate your IRMAA is incorrect.
Appealing your IRMAA determination can ensure that you pay the amount reflective of your current income, not past earnings.
It’s important to understand IRMAA and how it may affect your Medicare costs. Planning ahead and monitoring your income can help you avoid unexpected expenses and ensure you have the right coverage for your healthcare needs.
Keeping costs down when enrolled in Original Medicare
If you are enrolled in Original Medicare, it is beneficial to access care with providers that Accept Assignment. Accept Assignment simply means that your doctor, provider or medical supplier contractually agrees to accept the Medicare approved payment as payment in full for the services rendered, which prevents them from charging extra.
Under assignment, the provider agrees to submit your claims and will ask you for payment only after Medicare has processed the claim. Additionally, your out-of-pocket costs could be less.
Most Medicare contracted providers accept assignment, you want to make sure your providers do before receiving care. If your doctor doesn’t accept assignment, you could be exposed to the Part B excess, which is an additional 15% of the cost of care.
Need help understanding your out-of-pocket costs?
Our licensed Medicare insurance agents are available to help you with cost estimates and budgeting for your various Medicare plan options.
Give us a call today at 703-214-4600. Remember our services are always 100% free.
