Cost of Medicare
Unexpected illnesses can lead to high costs. Medicare coverage helps to manage your health and save money, but you will be responsible for certain expenses.
Understanding Medicare costs
Your total expenses may include premiums (regular payments for coverage), deductibles (what you pay before coverage starts), copays (fixed amounts for services), and coinsurance (percentage of costs you share).
Understanding these terms can help you choose the plan that best fits your financial needs.
Tip: Don’t judge a plan by its price tag alone. Along with premiums, deductibles, and out-of-pocket costs, consider the coverage for services and prescriptions you need, provider networks, and any additional benefits.
Are Medicare costs the same for everyone?
Original Medicare (Parts A and B) has premiums and deductibles set by the government each year. Private insurance carriers set the costs for the Medicare Supplement, Medicare Part D, and Medicare Advantage (Part C) plans they offer.
Tip: Original Medicare doesn’t cap your annual out-of-pocket costs, but Medicare Advantage plans each set an out-of-pocket maximum.
Find a plan that’s affordable for you
Choosing the right Medicare plan is an important decision that affects your health and finances. GoHealth’s licensed insurance agents can help you find and compare plans that fit your healthcare needs and budget.
What is a Medicare premium?
A health insurance premium is a monthly cost to keep your policy active. Original Medicare premiums are set by the federal government. Private insurance carriers decide the premiums for the Medicare Part D prescription drug plans, Medicare Supplement plans, and Medicare Advantage plans they offer.
Tip: While Medicare Part A is premium-free for most people, Part B has a monthly premium.
What is a Medicare premium?
A health insurance premium is a monthly cost to keep your policy active. Original Medicare premiums are set by the federal government. Private insurance carriers decide the premiums for the Medicare Part D prescription drug plans, Medicare Supplement plans, and Medicare Advantage plans they offer.
Tip: While Medicare Part A is premium-free for most people, Part B has a monthly premium.
Further reading:
Does Medicare have a deductible?
A deductible is the amount you pay out of pocket for covered healthcare services before your insurance plan begins to pay. Original Medicare has separate deductibles for hospital (Part A) and medical (Part B) insurance. Private insurance carriers may set a range of deductibles for Medicare Advantage or Medicare Part D plans.
After meeting your deductible, you typically pay copays or coinsurance for covered services.Tip: When choosing your plan, weigh the trade-off between higher deductibles and lower monthly premiums based on your health needs and financial situation.
Further reading:
Does Medicare have a deductible?
A deductible is the amount you pay out of pocket for covered healthcare services before your insurance plan begins to pay. Original Medicare has separate deductibles for hospital (Part A) and medical (Part B) insurance. Private insurance carriers may set a range of deductibles for Medicare Advantage or Medicare Part D plans.
After meeting your deductible, you typically pay copays or coinsurance for covered services.
Tip: When choosing your plan, weigh the trade-off between higher deductibles and lower monthly premiums based on your health needs and financial situation.
What is the maximum Medicare out-of-pocket limit?
Many people are surprised to learn that Original Medicare (Parts A & B) doesn’t have an out-of-pocket maximum. Medicare Part C (Medicare Advantage) plans are legally required to establish an out-of-pocket maximum for in-network and out-of-network healthcare. Starting in 2024, Medicare Part D plans also have an out-of-pocket limit.
Tip: Monthly Medicare Advantage premiums don’t count toward your out-of-pocket expenditures.