Most people on Medicare pay $185 per month for Part B (medical insurance) in 2025, plus various deductibles and copays depending on the services they use. But the total cost of Medicare depends on which parts you have, your income, and whether you choose Original Medicare or a Medicare Advantage plan. Here’s what each piece actually costs.
Part A: Hospital Insurance
Part A covers hospital stays, skilled nursing facilities, and hospice care. If you or your spouse paid Medicare taxes for at least 10 years (40 quarters), you pay no monthly premium for Part A. This applies to the vast majority of Medicare beneficiaries.
If you don’t qualify for premium-free Part A, you’ll pay either $311 or $565 per month, depending on how long you or your spouse worked and paid into the system. Even with premium-free Part A, you still owe a deductible of $1,736 for each hospital benefit period. A benefit period starts when you’re admitted and ends 60 days after you leave. If you’re hospitalized twice in the same year with a gap of 60 or more days between stays, you pay the deductible twice.
Part B: Doctor Visits and Outpatient Care
Part B covers doctor appointments, outpatient procedures, lab tests, preventive screenings, and durable medical equipment. The standard monthly premium is $185 in 2025, and the annual deductible is $257. After meeting the deductible, you typically pay 20% of the Medicare-approved amount for most services.
That 20% coinsurance has no cap under Original Medicare, which is one reason many people buy supplemental coverage. A single expensive surgery or cancer treatment can make that 20% add up fast.
Higher Premiums for Higher Incomes
If your modified adjusted gross income is above a certain threshold (based on your tax return from two years prior), you’ll pay more than the standard $185 per month. These income-related surcharges, known as IRMAA, apply to both Part B and Part D premiums. The adjustments kick in at different income brackets and can significantly increase your monthly costs. If your income has dropped since the tax year used for the calculation (due to retirement, divorce, or other life changes), you can appeal.
Part D: Prescription Drug Coverage
Part D covers prescription medications and is sold by private insurance companies, so premiums vary by plan and location. Most plans charge somewhere between $10 and $80 per month, with the specific amount depending on which drugs the plan covers and what pharmacy network it uses.
The big change for 2025 is a new $2,000 annual cap on out-of-pocket drug spending. Once you hit $2,000 in copays and coinsurance for the year, you pay nothing more for covered prescriptions. Before this cap took effect, some beneficiaries faced thousands of dollars in drug costs during the coverage gap (sometimes called the “donut hole”). The $2,000 limit applies regardless of which Part D plan you choose.
Medicare Advantage: An Alternative Cost Structure
Medicare Advantage plans (Part C) are offered by private insurers as an alternative to Original Medicare. They bundle Part A, Part B, and usually Part D into one plan, often with additional benefits like dental, vision, and hearing coverage. Many Medicare Advantage plans charge $0 in additional monthly premiums beyond the $185 Part B premium you still have to pay.
The trade-off is that these plans use provider networks (HMOs or PPOs), and costs for individual services vary by plan. However, every Medicare Advantage plan is required to cap your annual out-of-pocket spending. In 2025, the maximum allowable cap is $9,350 for in-network services and $14,000 for in-network and out-of-network services combined. Many plans set their caps lower than these maximums. This built-in spending limit is one of the main financial advantages over Original Medicare, which has no out-of-pocket ceiling.
Medigap: Supplemental Insurance for Original Medicare
If you stick with Original Medicare, you can buy a Medigap (Medicare Supplement) policy to cover some or all of the costs Original Medicare doesn’t pay, like the 20% Part B coinsurance and the Part A hospital deductible. Medigap plans are standardized by letter (Plan G, Plan N, etc.), meaning the benefits for each letter are identical no matter which company sells the policy. The only difference between two Plan G policies from different insurers is the price.
And that price difference can be substantial. Monthly premiums for the same plan letter vary widely by company, location, your age, and whether you smoke. Insurers also use different pricing methods: some base your premium on your current age (so it rises as you get older), while others lock in a rate based on the age you were when you enrolled. Discounts for non-smokers, married couples, or electronic payment can lower the cost further. Premiums typically increase each year regardless of pricing method.
The best time to buy a Medigap policy is during your six-month open enrollment period, which starts the month you turn 65 and are enrolled in Part B. During this window, insurers cannot deny you coverage or charge you more because of health conditions.
What a Typical Year Costs
For someone on Original Medicare with no supplemental coverage, here’s a rough picture of annual baseline costs in 2025:
- Part B premium: $2,220 per year ($185 x 12)
- Part B deductible: $257
- Part A deductible: $1,736 per hospital stay
- Part B coinsurance: 20% of covered services after the deductible
- Part D premium: varies by plan, typically $120 to $960 per year
- Part D out-of-pocket costs: capped at $2,000 per year
A healthy person who rarely sees a doctor might spend around $2,500 to $3,500 per year. Someone managing chronic conditions, taking multiple medications, or needing a hospital stay could easily spend $6,000 to $10,000 or more, unless they have supplemental coverage or a Medicare Advantage plan with a lower out-of-pocket cap.
Late Enrollment Penalties
Signing up late for any part of Medicare can permanently increase your costs. These aren’t one-time fees. They’re added to your monthly premium for as long as you have that coverage, which for most people means the rest of their lives.
For Part B, you’ll pay an extra 10% on your premium for each full year you were eligible but didn’t enroll. If you waited two years, that’s a 20% penalty on top of the standard premium, every month, indefinitely. For Part D, the penalty is 1% of the national base beneficiary premium for each month you went without creditable drug coverage, and that adds up to 12% per year of delay. Part A penalties are less common since most people get it premium-free, but if you have to buy Part A and don’t sign up when first eligible, you’ll pay a 10% higher premium for twice the number of years you delayed.
These penalties don’t apply if you had qualifying coverage through an employer or union during the gap. But if you simply forgot to sign up or didn’t think you needed it, the penalty sticks.
Financial Help if You Qualify
Several programs can reduce or eliminate Medicare costs for people with limited income. Medicare Savings Programs, run by state Medicaid offices, can pay your Part B premium, deductibles, and coinsurance depending on your income level. The Qualified Medicare Beneficiary (QMB) program covers the most costs, and eligibility in 2026 extends to individuals with monthly income up to $1,350 and resources up to $9,950 (limits are slightly higher for married couples and for residents of Alaska and Hawaii).
For prescription drugs, the Extra Help program (also called the Low-Income Subsidy) pays Part D premiums, deductibles, and copays for qualifying beneficiaries. In 2026, individuals with annual income up to $23,940 and resources up to $18,090 may qualify. Married couples can have income up to $32,460 and resources up to $36,100. Even if you’re slightly above these limits, partial Extra Help may be available. You can apply through Social Security’s website or by calling your local Social Security office.