The Costs of Medicare, Made Clear
Medicare isn’t a single bill — it’s a mix of premiums, deductibles, and cost-sharing spread across its parts. Here’s what you actually pay for each piece, where the hidden risks are, and the smart ways to keep your costs down.
Start here: Medicare is not one bill
Each part of Medicare has its own costs. Some you pay monthly (premiums), some you pay before coverage kicks in (deductibles), and some you pay as you use care (copays and coinsurance). The most important thing to know up front: Original Medicare by itself has no yearly limit on what you can spend — which is exactly why most people add coverage that caps it.
What each part of Medicare costs
The exact amounts are set each year and depend on your income and plan — so we keep this to what you pay for, and confirm your real numbers by ZIP code when you’re ready.
Hospital Coverage
- Premium: most people pay nothing — you earned it through years of working and paying Medicare taxes.
- Deductible: charged per hospital benefit period, not per year — so more than one can apply in a single year.
- Coinsurance: no daily charge for a standard stay, then a daily amount kicks in for longer stays.
Medical Coverage
- Premium: a standard monthly amount (higher earners pay more — see IRMAA below).
- Deductible: a modest annual amount before coverage begins.
- Coinsurance: you typically pay 20% of most services — with no yearly cap under Original Medicare alone.
Prescription Drugs
- Premium: varies by the plan you choose (higher earners pay an income surcharge).
- Deductible & cost-sharing: a capped deductible, then copays or coinsurance for your drugs.
- Yearly ceiling: the old “donut hole” is gone — once your out-of-pocket reaches the annual cap, covered drugs cost you nothing the rest of the year.
IRMAA — the income surcharge
＄ Higher incomes pay more for Part B and Part D
If your income is above a set threshold, you’ll pay an Income-Related Monthly Adjustment Amount (IRMAA) — an extra charge added to your Part B and Part D premiums. It’s based on your tax return from two years earlier, so a high-income year can affect you later even after you retire.
The good news: if your income dropped because of a life-changing event — retirement, a spouse’s passing, divorce, or loss of income — you can ask to have IRMAA reconsidered. Many people don’t realize this, and it’s one of the first things we check for you.
IRMAA Calculator
Slide your income to see, live, whether the surcharge applies — and exactly what it adds each month.
Based on your income from two years prior (the federal two-year lookback). If your income dropped after a life-changing event — like retirement or the loss of a spouse — you may be able to have IRMAA reconsidered, and we can help you request it.
Have Us Review My IRMAAThe gap that catches people off guard
That 20% with no yearly cap is the single biggest financial risk in Original Medicare. One serious illness — surgery, cancer treatment, an extended stay — can mean thousands in coinsurance with no ceiling. There are two proven ways to cap it.
Add a Medicare Supplement (Medigap)
Pay a predictable monthly premium and a Medigap plan covers most or all of what Original Medicare leaves behind — so your out-of-pocket at the doctor and hospital drops to little or nothing. You add a separate Part D plan for drugs.
Choose a Medicare Advantage plan
An all-in-one plan, often with a low or no premium beyond Part B, that caps your yearly out-of-pocket. You pay copays as you go, usually within a network, and drug coverage is typically built in.
✓ Some of the most valuable care is free
Many preventive services are covered at 100% — no deductible, no coinsurance — when you use providers who accept Medicare. These are among Medicare’s best benefits, and skipping them leaves value on the table.
Ways to lower what you pay
Depending on your income and situation, several programs can meaningfully cut your Medicare costs — and we’ll check every one you might qualify for.
Extra Help
A federal program that lowers or eliminates Part D drug costs for those with limited income and resources.
Medicare Savings Programs
State programs that can help pay your Part B premium — and sometimes deductibles and coinsurance — if you qualify.
Medicaid (Dual-Eligible)
If you qualify for both Medicare and Medicaid, special plans can add benefits, often at no premium.
Appeal IRMAA
Had a life-changing drop in income? You may be able to reduce or remove the income surcharge.
Pick the right plan
The lowest premium isn’t always the lowest total cost. We match the plan to your doctors and medications so you don’t overpay.
Use your free benefits
Preventive visits and screenings at no cost help catch issues early — protecting your health and your wallet.
Know your real numbers before you decide.
Every cost here depends on your income, your plan, and your ZIP code. A licensed May River agent will walk you through what you’ll actually pay, check which savings programs you qualify for, and make sure you’re never paying for coverage you don’t need. Free, and with no pressure.
Let’s Find Your Lowest Total Cost — Not Just the Lowest Premium.
Tell us your situation and we’ll pull real numbers for your ZIP code, check every discount and assistance program you qualify for, and help you choose coverage that fits your budget and your health.
This page is educational and general in nature; it is not financial or insurance advice. Medicare premiums, deductibles, coinsurance, income thresholds, and program eligibility are set each year and vary by income, plan, state, and ZIP code, and can change over time. Eligibility for assistance programs depends on your specific situation. May River Medicare is a licensed, independent agency and does not offer every plan available in your area; any information we provide is limited to the plans we do offer. We are not affiliated with or endorsed by the U.S. government or the federal Medicare program. Contact Medicare.gov or 1-800-MEDICARE for information on all of your options.