Medicare aims to help older adults and those with certain health conditions fund healthcare costs, but it is not completely free. Each part of Medicare has different costs, which can include coinsurances, deductibles, and monthly premiums.

A deductible is a sum that a person must spend out-of-pocket before an insurance provider will start funding treatment.

Coinsurance is when a person pays a certain percentage of treatment or consultation.

Copayments are fixed sums that a person pays for a drug prescription or service, rather than a percentage.

Each of these factors can add to the financial impact of receiving healthcare under a Medicare plan.

In this article, we explain the costs and services of the different elements of Medicare.

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Medicate Part A can cover the cost of in-patient hospital treatments.

Most people do not pay a premium for Medicare Part A.

This is the portion of Medicare that covers in-patient hospital treatment, including hospital stays and sometimes rehabilitation stays if a doctor deems these services to be medically necessary.

According to, a person qualifies for premium-free Medicare Part A if they meet the following requirements:

  • They are 65 years of age.
  • They or their spouse worked for at least 40 quarters and paid Medicare taxes.
  • They or their spouse get retirement benefits from Social Security or the Railroad Retirement Board or are eligible for these benefits
  • They are under 65 years of age but have a disability or certain medical conditions, such as end stage renal disease.

If a person meets these criteria, they can receive Medicare Part A without having to pay a monthly premium.

People who are not eligible for a free Medicare Part A plan may be able to pay for a portion of it. If a person worked and paid Medicare taxes for 30–39 quarters, in 2024, they may pay a monthly premium of $278 for Part A.

If a person worked less than 30 quarters, they may pay a Part A premium of $505 per month.

People will still have out-of-pocket costs for Medicare Part A, even if they are eligible for a free plan.

For 2024, these costs include a deductible of $1,632 for each benefit period. A benefit period for Medicare part A starts when a hospital or skilled nursing facility admits the insured individual. It ends 60 days after a person stops receiving hospital care related to the stay.

Once these 60 days are up, the deductible resets and a person has to meet it again if they need another hospital admission later on.

Medicare Part B is the Medicare portion that funds doctors’ visits and other related costs. If a person chooses Medicare Part B, they will pay a monthly premium. For 2024, the standard premium is $174.70.

Some people may pay a higher monthly premium depending on their income. People earning over a certain amount will pay slightly more for Part B.

Other out-of-pocket costs apply alongside the premium. Medicare Part B has a deductible of $240 for 2024, as well as a 20% coinsurance for consulting with Medicare-approved doctors.

Medicare Advantage or Medicare Part C is a plan that combines the services of Medicare Part A and Part B, as well as some additional services, such as prescription drug coverage. Some plans also cover vision and dental services. Medicare Advantage is available through private health insurance companies.

When a person is shopping for Medicare Advantage plans, they may find that some offer free monthly premiums. The exact price will vary depending on the Advantage plans available in a certain area.

However, a person will still pay a premium for Medicare Part B. People may also find that the plans offering free premiums have higher out-of-pocket costs.

Private health insurance companies can offer premium-free services in some instances because they receive money from Medicare.

The insurance companies then use this money to negotiate costs with their network of physicians, hospitals, and healthcare organizations. As a result, they can pass along cost savings to their plan members.

As with other aspects of Medicare, having a Medicare Advantage plan does not mean a person will not pay for healthcare costs at all. Medicare Advantage plans often have specific deductibles and copayments for certain services.

The cost-effectiveness of an Advantage plan depends upon the types of healthcare services a person normally uses.

Medicare Advantage plans typically have a yearly out-of-pocket limit for costs. This means that once a person spends a certain amount of money on deductibles or coinsurance payments, the plan will cover 100% of treatment costs until the next year.

Medicare Part D provides prescription drug coverage. For those with Medicare Advantage, these services are a part of the monthly premium.

People with traditional Medicare policies who want to purchase Medicare Part D from a private insurance company will pay a monthly premium for their prescription drug costs. They may also have out-of-pocket costs, based on the types of prescriptions they take.

The CMS projects that the average total monthly premium for a prescription drug plan will be $55.50 in 2024. Privately administered drug plans will vary in cost.

People with traditional Medicare can take out a Medicare supplement insurance or Medigap to help them fund out-of-pocket costs and some additional services that original Medicare does not cover.

These policies are not free, but they can help reduce costs for Medicare’s copayments, deductibles, and coinsurances.

Private health insurance companies offer these plans for a monthly premium.

As a person ages, their healthcare costs tend to get more expensive.

The government put Medicare in place to protect older individuals, help them cover their costs, and negotiate affordable healthcare services on their behalf.

However, while Medicare may be cheaper than private insurance plans, some parts still come with monthly premiums and out-of-pocket costs.