Most people on Medicare pay $185 per month for Part B (medical coverage) and $0 for Part A (hospital coverage) in 2025. But the total cost of Medicare depends on which parts you have, your income, how often you use healthcare, and whether you add supplemental coverage. Here’s what each piece actually costs.
Part A: Hospital Coverage
About 99% of Medicare beneficiaries pay nothing for Part A because they or a spouse paid Medicare taxes for at least 10 years (40 quarters) while working. If you didn’t work that long, you can still buy into Part A. The reduced premium is $285 per month if you or your spouse have at least 30 quarters of work history. Without that, the full premium is $518 per month in 2025.
Even with premium-free Part A, you’ll pay a $1,676 deductible each time you’re admitted to the hospital. That deductible resets with each “benefit period,” which starts when you’re admitted and ends 60 days after you leave. If you’re hospitalized twice in a year with enough time between stays, you could pay that deductible twice. For skilled nursing facility care, Part A covers the first 20 days fully, then you pay a daily coinsurance for days 21 through 100.
Part B: Doctor and Outpatient Coverage
The standard Part B premium is $185 per month in 2025, and it’s typically deducted directly from your Social Security check. Part B also has an annual deductible of $257. After meeting that deductible, you generally pay 20% of the Medicare-approved amount for most services, with no cap on how much that 20% can add up to over the year. That open-ended cost sharing is one of the main reasons people buy supplemental insurance.
For a typical beneficiary paying only Part B with premium-free Part A, the baseline cost is $2,220 per year in premiums alone, before any deductibles or coinsurance.
Higher Premiums for Higher Earners
If your income is above a certain threshold, you’ll pay more for both Part B and Part D through what’s called an income-related monthly adjustment amount (IRMAA). The surcharges are based on your tax return from two years prior.
For single filers, the extra charges kick in at $106,000 in modified adjusted gross income. For married couples filing jointly, the threshold is $212,000. At the lowest surcharge tier, your Part B premium rises to roughly $259 per month. At the highest tier (income of $500,000 or more for single filers, $750,000 for joint filers), it can reach nearly $595 per month. Part D prescription drug premiums also increase at each bracket, adding anywhere from about $13 to $81 per month on top of your plan’s base premium.
These surcharges affect a relatively small share of beneficiaries, but they can significantly increase your total Medicare costs if you have retirement income from pensions, investments, or Roth conversions pushing your income above the thresholds.
Part D: Prescription Drug Coverage
Part D is sold by private insurance companies, so premiums vary by plan and location. The national base premium used for penalty calculations is about $37 per month, but actual plan premiums range widely. The maximum annual deductible a Part D plan can charge is $590 in 2025. After the deductible, you pay copays or coinsurance that depend on your specific plan and which tier your medications fall into.
One significant recent change: starting in 2025, Part D plans cap your total out-of-pocket drug spending at $2,000 per year. Before this cap existed, people taking expensive medications could face bills of $10,000 or more annually. This is a major cost protection, especially for anyone on brand-name or specialty drugs.
Medicare Advantage (Part C)
Medicare Advantage plans are an alternative to Original Medicare, bundling Parts A, B, and usually D into a single plan run by a private insurer. About 76% of people enrolled in Medicare Advantage plans with drug coverage pay no additional premium beyond the standard $185 Part B premium. Among all enrollees, the average additional premium is just $13 per month.
The trade-off is that you use a network of providers and may need referrals or prior authorization for certain services. The upside is a built-in cap on your out-of-pocket spending, something Original Medicare lacks entirely. In 2025, Medicare Advantage plans can set their in-network out-of-pocket limit no higher than $9,350, and the combined in-network and out-of-network limit can’t exceed $14,000. In practice, the average in-network limit among enrollees is around $5,320.
Medigap: Supplemental Insurance
If you stick with Original Medicare (Parts A and B), you’re exposed to that uncapped 20% coinsurance on Part B services plus hospital deductibles. Medigap policies, sold by private insurers, cover some or all of those gaps. Premiums vary widely by plan type, your age, your location, and the insurance company. There’s no single national price, but common plans like Plan G or Plan N can range from under $100 to over $300 per month depending on these factors.
The best time to buy Medigap is during your open enrollment period, which starts the month you turn 65 and are enrolled in Part B. During this six-month window, insurers must sell you a policy regardless of your health and can’t charge more because of pre-existing conditions. After that window closes, you may be denied coverage or charged significantly higher premiums based on your health status, depending on your state’s rules.
Late Enrollment Penalties
Signing up late for Part B or Part D can permanently increase your premiums. For Part B, you’ll pay an extra 10% for every full 12-month period you were eligible but didn’t enroll. That penalty stays on your premium for as long as you have Part B. For Part D, the penalty is 1% of the national base premium for every month you went without creditable drug coverage, which adds up to about 12% per year of delay.
These penalties don’t apply if you had qualifying coverage through an employer or union during the gap. But if you simply didn’t sign up because you didn’t think you needed it, the added cost is permanent.
Financial Help if You Have Low Income
Several programs can reduce or eliminate Medicare costs for people with limited income and savings. The Qualified Medicare Beneficiary (QMB) program covers your Part B premiums, deductibles, coinsurance, and copays if your monthly income is below $1,350 as an individual or $1,824 as a couple (with resources under $9,950 or $14,910 respectively). The Specified Low-Income Medicare Beneficiary (SLMB) program covers your Part B premium if your income is somewhat higher, up to $1,616 per month for individuals. The Qualifying Individual (QI) program extends that Part B premium help to individuals earning up to $1,816 per month.
There’s also Extra Help (Low-Income Subsidy) for Part D, which can dramatically lower your prescription drug costs. These programs are underused, and many people who qualify don’t realize they’re eligible. Your state Medicaid office handles applications for all of them.
Putting the Total Cost Together
For someone with typical income and premium-free Part A, here’s what a year of Medicare costs at minimum, before using any services:
- Part B premium: $2,220 per year ($185/month)
- Part D premium: varies, but roughly $200 to $600+ per year depending on plan
- Medigap premium (optional): $1,200 to $3,600+ per year depending on plan and location
On top of premiums, you’ll face the $1,676 hospital deductible if admitted, the $257 Part B deductible, and 20% coinsurance on outpatient care under Original Medicare. If you choose Medicare Advantage instead of Original Medicare plus Medigap, your premium costs may be lower, but you’ll pay copays and coinsurance up to the plan’s out-of-pocket maximum. Either way, Medicare is not free, even for people who paid into the system their entire working lives. Budgeting $3,000 to $7,000 or more per year in premiums and out-of-pocket costs is realistic for most beneficiaries.