Medicare covers total knee replacement surgery, but your out-of-pocket cost depends on where the surgery happens, how long you stay in the hospital, and whether you carry supplemental insurance. Under Original Medicare with no supplemental plan, most people pay somewhere between roughly $1,700 and $2,500 or more for the surgery itself, plus ongoing costs for rehabilitation and recovery equipment.
What You Pay for an Inpatient Hospital Stay
Most total knee replacements still happen as inpatient procedures, which means Medicare Part A covers the hospital stay. In 2025, you owe a $1,736 deductible for each benefit period before Medicare pays anything. After that deductible, you pay $0 per day for days 1 through 60. Since the typical hospital stay for knee replacement runs two to three days, most people only pay the $1,736 deductible and nothing more for the hospital portion.
If complications extend your stay beyond 60 days, costs rise sharply: $434 per day for days 61 through 90, and $868 per day after that if you dip into your lifetime reserve days. This is rare for knee replacement but worth knowing about.
Outpatient Surgery Changes the Math
A growing number of knee replacements are now performed on an outpatient basis, either in a hospital outpatient department or an ambulatory surgery center (ASC). When surgery is outpatient, it falls under Part B instead of Part A. That means you pay the $257 annual Part B deductible (rising to $283 in 2026), then 20% of the Medicare-approved amount for the procedure.
Your choice of facility matters here. Research comparing knee procedures at ASCs versus hospital outpatient departments found that patients at ASCs paid roughly 30% less out of pocket. The average difference was $400 to $500 in patient payments for the same procedure. Hospital outpatient departments charge higher facility fees, and since your 20% coinsurance is calculated on the total approved amount, a higher facility fee means a bigger bill for you.
Pre-Surgery Costs
Before surgery, you’ll need imaging (X-rays, possibly an MRI or CT scan) to confirm the arthritis or joint damage, along with blood work and a pre-operative medical evaluation. These diagnostic services fall under Part B. After your $257 deductible, you pay 20% of the Medicare-approved amount for each service. Individual imaging and lab costs are relatively modest, but they can add up across multiple appointments.
Physical Therapy and Rehabilitation
Rehabilitation is a major part of knee replacement recovery, and Medicare Part B covers outpatient physical therapy with no annual dollar cap. You pay 20% of the Medicare-approved amount for each session after your Part B deductible. A typical recovery involves physical therapy two to three times per week for several weeks, sometimes extending to two or three months. At 20% coinsurance per visit, these costs accumulate and can become one of the larger expenses of the entire process.
If you go to a skilled nursing facility after surgery instead of straight home, Part A covers the first 20 days at no cost to you (assuming you had a qualifying hospital stay). Days 21 through 100 carry a daily coinsurance. Many knee replacement patients recover at home, but this option exists for those who need more intensive post-surgical support.
Recovery Equipment
After surgery, your doctor will likely prescribe a walker, cane, or other durable medical equipment for use at home. Medicare Part B covers medically necessary equipment when your provider prescribes it. You pay 20% of the Medicare-approved amount after your deductible. Some equipment is rented rather than purchased, and certain items become yours after a set number of rental payments.
How Medigap Plans Reduce Your Costs
A Medigap (Medicare Supplement) policy can dramatically cut your out-of-pocket expenses. Most Medigap plans, including the popular Plans F, G, and N, cover 100% of the Part A hospital deductible and 100% of the 20% Part B coinsurance. With one of these plans, your cost for the surgery, rehab, and equipment could drop to little or nothing beyond your monthly Medigap premium.
Plans K and L offer partial coverage: Plan K covers 50% of the Part B coinsurance and 50% of the Part A deductible, while Plan L covers 75% of each. If you already have a Medigap plan, check which letter it is to understand exactly what’s covered.
Medicare Advantage Plans Work Differently
If you’re enrolled in a Medicare Advantage (Part C) plan instead of Original Medicare, your costs follow your plan’s specific rules rather than the standard Part A and Part B structure. Many Advantage plans charge a fixed copayment for inpatient surgery rather than a percentage, and they set an annual out-of-pocket maximum that caps your total spending. However, these plans typically require prior authorization before knee replacement surgery and limit you to in-network surgeons and hospitals. If your preferred orthopedic surgeon is out of network, you could face significantly higher costs or need to switch providers.
Research has found that Medicare Advantage insurers use managed care techniques like restricted specialist networks and post-procedure reviews that can affect both access to surgery and the timeline for getting approved.
A Realistic Cost Estimate
For someone on Original Medicare with no supplemental insurance, here’s a rough breakdown of what to expect in 2025:
- Inpatient surgery (Part A): $1,736 deductible, then $0 per day for a typical 2-3 day stay
- Outpatient surgery (Part B): $257 deductible plus 20% of the approved amount, with total patient costs varying by facility
- Physical therapy: 20% coinsurance per session over several weeks to months
- Equipment and follow-up visits: 20% coinsurance on each item or appointment
The surgery itself is the single largest charge, but rehabilitation is where costs quietly build over time. Choosing an ASC over a hospital outpatient department when your surgeon offers that option, or carrying a Medigap plan that covers your coinsurance, are the two most effective ways to keep your total spending down.