How Much Does Dialysis Cost With Medicare?

Medicare covers the bulk of dialysis costs for people with kidney failure, but it does not cover everything. Under Original Medicare, you pay 20% coinsurance on dialysis treatments after meeting the Part B deductible, plus your monthly Part B premium. Because total annual Medicare spending per dialysis patient averages roughly $92,000 to $109,000 depending on the type of dialysis, that 20% slice can become a serious financial burden without supplemental coverage.

What Medicare Pays and What You Owe

Medicare has covered dialysis for people with end-stage renal disease (ESRD) since 1973, making kidney failure one of the few specific diagnoses that qualifies someone for Medicare regardless of age. Under Part B, Medicare pays 80% of the approved amount for outpatient dialysis treatments, whether those happen at a clinic or at home. You are responsible for the remaining 20% coinsurance, plus the annual Part B deductible and the standard monthly Part B premium.

To understand what 20% actually means in dollars, consider the scale of the spending. Overall Medicare spending on hemodialysis patients averaged about $108,656 per person in 2017, while spending on peritoneal dialysis patients averaged about $91,716.¹ Those figures include all Medicare-covered services for the patient, not just the dialysis sessions themselves. Dialysis treatments account for close to 80% of total Medicare expenditures on ESRD beneficiaries.² For context, in 2020 Medicare spent about $29 billion on hemodialysis and $2.8 billion on peritoneal dialysis across all beneficiaries.²

Medicare does not pay providers whatever they bill. Since 2011, outpatient dialysis has operated under a bundled payment system, where facilities receive a fixed payment per hemodialysis session or peritoneal dialysis day regardless of which specific drugs, supplies, or lab tests are used during that treatment.³ This bundled approach was a deliberate shift away from fee-for-service billing, intended to control the rapid spending growth that had characterized the dialysis program for decades.⁴ The practical effect for you is that your 20% coinsurance is calculated against this fixed bundled rate, not against an itemized bill. That makes your per-session cost more predictable than it would be under open-ended billing.

The Waiting Period Before Coverage Starts

If you are not already on Medicare when you start dialysis, there is typically a 90-day waiting period before your ESRD-based Medicare coverage begins.⁵ During those three months, you need other insurance to cover your treatments, whether that is employer-sponsored coverage, a marketplace plan, Medicaid, or something else. Without any coverage, those initial months can be financially devastating. In-center hemodialysis typically runs three sessions per week, and the uninsured cost per session is far higher than what Medicare pays.

There is one important exception: if you start on home dialysis, the 90-day waiting period is waived.⁵ This means your Medicare coverage can begin more quickly if you do peritoneal dialysis or home hemodialysis instead of going to a clinic. It is worth knowing about this waiver because the financial gap during those first three months catches many people off guard, and switching to a home modality can close it.

Planning ahead matters beyond just insurance enrollment. Patients who have a planned transition to dialysis rather than an emergency start tend to have substantially better outcomes. One study found that patients with an optimally planned transition were 57% to 72% less likely to die compared with those who started dialysis unplanned, and 20% to 37% less likely to be hospitalized.⁶ Fewer hospitalizations directly translates to lower costs for both Medicare and you.

Hemodialysis vs. Peritoneal Dialysis Costs

If you have a choice between hemodialysis and peritoneal dialysis, the cost difference is real. Medicare spends roughly 11% more per patient on hemodialysis than on peritoneal dialysis. In 2017, average total Medicare expenditures per patient were about $108,656 for hemodialysis and $91,716 for peritoneal dialysis.¹ Because your coinsurance is a percentage of the total, lower overall costs mean a smaller bill for you too.

Peritoneal dialysis is a home-based treatment, so it eliminates the need for three weekly trips to a dialysis center. That saves on transportation costs, which Medicare does not cover for routine dialysis in most cases. It also gives you more scheduling flexibility. The trade-off is that peritoneal dialysis requires training and a suitable home environment, and not everyone is a candidate for it based on their medical situation.

For home dialysis broadly, Medicare has tried to encourage adoption by creating extra payments for innovative home equipment. Through a mechanism called TPNIES, dialysis providers can receive reimbursement of up to 26% of the cost of approved home dialysis machines on top of the standard bundled payment.³ This incentive is aimed at providers rather than patients, but it matters to you because it makes clinics more willing to offer and support home dialysis options that were previously harder to access.

Costs Beyond the Dialysis Session

The treatment itself is only part of the bill. If you are on hemodialysis, you need a vascular access point, either an arteriovenous fistula (AVF), a graft, or a catheter. Creating, maintaining, and sometimes replacing that access adds significant costs. For patients who had an AVF created, annual vascular access costs ranged from about $7,900 when the fistula worked well to over $31,600 when it never matured enough to be used for dialysis.⁷ A fistula that fails means you stay on a catheter, which costs more to maintain and carries a higher risk of infection.

Hospitalizations are another major cost driver. Nearly half of emergency department visits by dialysis patients result in a hospital admission.⁸ The most common reasons for admission in the first year of dialysis include problems with the hemodialysis access, serious infections, and heart failure.⁸ Each hospitalization comes with its own deductible and cost-sharing under Medicare Part A. For a dialysis patient who is hospitalized multiple times per year, these inpatient costs can dwarf the outpatient dialysis coinsurance.

Some care models have shown promise in reducing these extra costs. The Comprehensive ESRD Care (CEC) model, which coordinated dialysis and medical care more tightly, was associated with about five fewer hospitalizations per 1,000 patients per month compared with standard care.⁹ Fewer hospitalizations benefit both the system and your wallet.

Prescription Drugs and Part D

Dialysis patients typically take multiple medications: blood pressure drugs, phosphate binders, medications to manage anemia, and others. Some of these drugs are included in the bundled payment your dialysis facility receives and are administered during treatment sessions, so you do not pay separately for them. But many oral medications you take at home fall under Medicare Part D, the optional prescription drug benefit.

Part D coverage for kidney failure patients has some real gaps. Several key ESRD medications are not covered by Part D plans, and brand-name drugs used for kidney disease are often placed in higher cost-sharing tiers, meaning larger copays.¹⁰ Dialysis patients also face higher out-of-pocket drug expenses than the general Medicare population and are more likely to hit the coverage gap, the spending zone where your cost-sharing temporarily increases.¹⁰ Recent legislative changes have capped annual out-of-pocket spending under Part D, which helps, but dialysis patients still tend to spend more on prescriptions than other Medicare beneficiaries because of the sheer volume and specialty nature of their medications.

Ways to Reduce Your Out-of-Pocket Costs

The 20% coinsurance on dialysis and the Part A deductibles on hospitalizations add up fast. Several supplemental coverage options can absorb some or all of that cost.

Medigap (Medicare Supplement Insurance) plans are sold by private insurers and cover some or all of the cost-sharing gaps in Original Medicare. If you are 65 or older, federal law guarantees you can buy a Medigap policy during your initial enrollment period. But if you qualify for Medicare through ESRD before age 65, Medigap access varies dramatically by state. Some states require insurers to offer Medigap to younger disabled beneficiaries; others leave it entirely to the insurer’s discretion.¹¹ If you are under 65 in a state with weak protections, you may be unable to find affordable Medigap coverage at all, leaving you exposed to the full 20% coinsurance.

Medicare Advantage plans are another option, and a relatively new one for dialysis patients. Before 2021, most people with ESRD were locked out of Medicare Advantage plans. The 21st Century Cures Act changed that, allowing ESRD beneficiaries to enroll in Medicare Advantage starting in January 2021.¹² These plans often have out-of-pocket maximums that cap your annual spending, which Original Medicare does not. However, Medicare Advantage plans use provider networks, and some plans have been found to have narrow dialysis networks, meaning fewer participating facilities in your area. If your preferred dialysis center is not in-network, you could face higher costs or need to switch.

Medicaid can fill the remaining gaps for people with limited income and assets. Patients who qualify for both Medicare and Medicaid, known as dual-eligible beneficiaries, generally have little to no cost-sharing because Medicaid picks up the coinsurance and deductibles that Medicare does not cover. In states that expanded Medicaid, dual coverage among new dialysis patients increased by about 2.6 percentage points in the months after starting dialysis.¹³ Even if you are not fully Medicaid-eligible, your state may offer a Medicare Savings Program that pays your Part B premium and sometimes your deductibles and coinsurance. These programs have higher income limits than full Medicaid and are worth looking into.

When You Still Have Employer Insurance

If you are working or covered by a spouse’s employer plan when you develop kidney failure, Medicare does not immediately become your primary insurer. Under the Medicare Secondary Payer Act, your employer-based group health plan remains the primary payer for dialysis and other medical services during a 30-month coordination period after you become eligible for Medicare due to ESRD. Medicare acts as secondary payer during those 30 months, picking up costs that the employer plan does not cover.

This arrangement has significant financial implications. Private insurers consistently pay much more for dialysis than Medicare does. One analysis found that per-person-per-month outpatient dialysis spending by private insurers was about $10,149, compared with $3,364 for Medicare.² That roughly threefold difference in payment rates is why dialysis providers earn substantially more from privately insured patients. From the federal government’s perspective, this coordination period saves money by keeping dialysis patients on private insurance longer. One study estimated the policy reduced federal outlays by about $2,200 per privately insured dialysis patient-year.¹⁴

For you personally, whether this coordination period helps or hurts depends on your employer plan’s design. If your employer plan has generous coverage with low copays, you may pay less during the coordination period than you would under Medicare’s 20% coinsurance. If your plan has high deductibles and steep out-of-pocket maximums, the 30-month stretch may feel like a burden. Either way, once the coordination period ends, Medicare becomes the primary payer, and your employer plan becomes secondary or you may drop it entirely.

How a Kidney Transplant Changes the Financial Picture

For patients who are candidates, a kidney transplant is not just a medical decision but a financial one. The first year of a transplant is expensive, averaging around $87,400, and a failed transplant that sends someone back to dialysis costs even more at roughly $137,900 in the year following failure.¹⁵ But a functioning transplant costs about $13,750 per year to maintain, compared with roughly $67,500 per year for a patient on dialysis.¹⁵ That roughly fivefold difference in annual maintenance costs means the high upfront investment in transplantation pays for itself within about two and a half to four years.¹⁶

Medicare covers the transplant surgery and related care. However, there is a coverage cliff that catches many transplant recipients. Medicare ESRD coverage based solely on kidney failure ends 36 months after a successful transplant if you would not otherwise qualify for Medicare. At that point, you lose coverage for the immunosuppressive drugs you need to keep the transplanted kidney working. Congress extended immunosuppressive drug coverage in 2020 for people who would otherwise lose Medicare, but only for those drugs, not for the rest of your medical care. If a transplant fails because someone could not afford their anti-rejection medications, the patient returns to dialysis and re-enters the far more expensive cycle of ongoing treatment. Both the medical and financial logic favor making sure transplant recipients can maintain their medication coverage long-term.

What Private Insurance Patients Pay by Comparison

It is worth understanding where Medicare fits in the broader landscape of dialysis payment. If you have private insurance rather than Medicare, the sticker price your insurer pays for dialysis is dramatically higher. Per-person-per-month outpatient dialysis spending by private insurers was estimated at about $10,149, roughly three times the $3,364 Medicare spends.² This does not mean privately insured patients always pay more out of pocket; that depends on the specific plan’s cost-sharing design. But it does mean that the total financial exposure under private insurance can be far greater if you hit a high deductible or lack an out-of-pocket maximum.

This payment gap also explains why large dialysis organizations have been the subject of political controversy over charitable premium assistance. Some dialysis companies have funded nonprofits that help patients maintain private insurance rather than switching to Medicare, because the reimbursement from private plans is so much higher. Whether this practice benefits patients, providers, or both remains a contested question in health policy. From your perspective as a patient, the key takeaway is that Medicare, despite its 20% coinsurance, tends to be the more predictable and often more affordable option once you are past the initial enrollment period and any coordination with employer coverage.