Do you have to pay for Medicare, or is it free?
- Most people don’t pay for Medicare Part A (hospital insurance), however you do pay co-insurance and an annual deductible.
- There is a premium for Medicare Part B. It also has a deductible and co-insurance.
- After you pay your deductibles, you pay 20% of all Medicare-covered costs. [1]
- Medicare does not pay for dental care or oral surgery [2], vision care [3] , hearing exams or hearing aids [4], or your prescription medications. [5]
Related: Learn about Original Medicare
Medicare Part A Co-payments and Deductibles
Medicare is definitely not free, but it covers quite a bit. As a Medicare beneficiary, you are responsible for paying co-payments and deductibles, just as you would with traditional health insurance.
As an example, in 2017, beneficiaries with a hospital stay pay:
- $1,316 deductible for each benefit period
- Days 1-60: $0 coinsurance for each benefit period
- Days 61-90: $329 coinsurance per day of each benefit period
- Days 91 and beyond: $658 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
- Beyond lifetime reserve days: all costs
If you go to a skilled nursing facility after a three-day stay in the hospital, you’ll pay:
- Days 1–20: $0 for each benefit period.
- Days 21–100: $164.50 coinsurance per day of each benefit period.
- Days 101 and beyond: all costs.
Medicare Part B Co-payments and Deductibles
You pay $183 per year for your Part B deductible. After that you typically pay 20% of the Medicare-approved amount for:
- Most doctor services and lab work
- Outpatient therapy
- Durable medical equipment
Medicare Part C Costs
If you opt to exchange your Part A and B benefits for a Medicare Advantage (Part C) plan, your out-of-pocket costs will depend on:
- Whether the plan charges an additional monthly premium.
- Whether the plan pays any of your monthly Medicare Part B premium.
- Whether the plan has an additional deductible or any additional deductibles.
- How much you pay for each visit or service (copayment or coinsurance).
- The type of health care services you need and how often you get them.
- Whether you go to a doctor or supplier who accepts assignment (if you’re in a PPO, PFFS, or MSA plan and you go out-of-network).
- Whether you use network providers, if required by the plan.
- Whether you need extra benefits and if the plan charges for it.
- The plan’s yearly limit on your out-of-pocket costs for all medical services.
- Whether you have Medicaid or get help from your state.
Medicare Part D Co-payments and Deductibles
Medicare Prescription Drug Plans (Part D) also have co-payments and deductibles, and plans have a monthly premium (unless you qualify for Extra Help through SSA). Most plans have a coverage gap, known as the “donut hole”, which begins after a certain level of spending. Within the donut hole, people receive a discount of 50 percent on brand-name drugs. When the end of the coverage gap is reached, there is a 5 percent co-payment on future drug purchases.
Some people enrolled in Medicare purchase Medicare Supplement Insurance (Medigap) policies to help pay the co-payments, deductibles, and other charges under Medicare. For those still working at age 65, or those who are 65 and older and have retiree health insurance, coverage through current or former employers will help pay the bills. The policies (the employer coverage and Medicare) are coordinated to provide the most help with co-payments and deductibles. Medicare does not cover custodial care in a nursing home, which can be a major expense after age 65. Only skilled care and rehabilitation services in a nursing home, for medical treatment of an acute illness, are covered.
Related FAQs
Reference
[1] “Medicare-covered” includes most doctor services, outpatient therapy, and durable medical equipment.
[2] Medicare does not pay for dental care or oral surgery costs unless required as an inpatient for another medical condition (e.g., cancer treatment).
[3] Medicare does not cover vision care. [2] (eye exams, eye glasses, contact lenses, etc.) except as required as an inpatient (e.g., cataract surgery).
[4] Medicare covers diagnostic hearing and balance exams, but doesn’t cover hearing exams, hearing aids, or exams for fitting hearing aids.
[5] Medicare does not pay for your prescription medications, except as used for treatment in an inpatient setting.