Walecia Konrad is an award-winning financial journalist and content producer specializing who has focused on health insurance and health care since 2008.
Diane Omdahl has been helping people navigate the complexities of Medicare for more than three decades. She is a nationally recognized Medicare expert, a registered nurse, serial entrepreneur, and has served as a technical expert for the Centers for Medicare and Medicaid Services (the organization that runs the Medicare program). She is a frequent speaker on Medicare-related issues. She has been featured in many national publications, including the Washington Post, CBS MoneyWatch, Forbes, The Wall Street Journal Market Watch, Kiplinger, and many more. Her most recent startup, 65 Incorporated, helps people 65 and older get the clear, correct, complete, and credible information they need to make important Medicare decisions. She is also the architect behind the i65 Medicare optimization software suite. i65 enables financial advisors to help clients make smart Medicare decisions.
We aim to help you make informed healthcare decisions. While this post may contain links to lead generation forms, this won’t influence our writing. We follow strict editorial standards to give you the most accurate and unbiased information.
What You Need to Know
Medicare won’t take care of all of your health care costs. You’ll be responsible for out-of-pocket costs and other services such as long-term care.
What you pay in premiums for the different parts of Medicare or supplemental insurance varies. In some cases, you may pay no monthly premium. In others, you may pay more depending on your income.
You have several ways to set up your Medicare coverage. You can choose Original Medicare, add additional benefits and coverage with Medicare Supplement and Part D or go with an all-in-one Medicare Advantage plan.
What is Medicare?
Medicare is the government-run health care program for people 65 and older signed into law in 1965. Today, more than 60 million Americans are enrolled in some type of Medicare coverage.1
Medicare won’t take care of all of your healthcare costs. You’ll be responsible for premiums, deductibles, and copayments. And some elements of health care, including long-term care, are not covered by Medicare at all.
Any U.S. citizen or person who has been a permanent legal resident for the past five years is eligible for Medicare. Younger people who are disabled are also eligible for Medicare, sometimes with a waiting period. The government’s Medicare eligibility tool can help determine who is eligible. 2
Understanding what each Medicare part covers and what your costs will be can help you successfully plan for healthcare costs as you age.
Medicare Part A — Hospital Insurance
What Does Part A Cover?
Medicare Part A covers the cost of inpatient hospital stays if you are admitted to a hospital that accepts Medicare after an official doctor’s order. Part A includes inpatient mental health services, stays at a skilled nursing facility, hospice and some home health care services.3
What Costs Will You Pay with Part A
Premiums
Premiums for Medicare Part A are free if you are age 65 or older and you or your spouse worked and paid Medicare taxes for at least 10 years. They are also free to Social Security Disability Insurance beneficiaries who have paid taxes.
If you and your spouse don’t meet this requirement, you can purchase Part A insurance for a monthly cost of premium if you paid Medicare taxes for less than 30 quarters. If you paid Medicare taxes for 30 to 39 quarters, you’ll pay $285 a month in 2025.
What Is Part A Cost Sharing?
A benefit period begins the day you’re admitted to a hospital or skilled nursing facility and ends when you haven’t received any inpatient hospital or skilled nursing facility care for 60 days in a row.
Medicare Part A beneficiaries pay an inpatient hospital deductible of $1,632 in 2025 for each benefit period. After that, there is no coinsurance for hospital stays up to 60 days. If you are in the hospital more than 60 days (not necessarily in a row), you’ll pay $408 per day up to 90 days. After 90 days, you are responsible for the full cost of hospitalization or you can use your lifetime reserve days. These are 60 days of additional hospital coverage to be used throughout your life. You’ll pay $816 for each lifetime reserve day you use.
If you qualify, Medicare Part A pays the costs (room, board, skilled care, etc.) of a skilled nursing facility for the first 20 days with a copay of $204 per day for the next 80 days. Skilled care includes nursing and therapy care performed by professionals in an inpatient setting. Skilled nursing care is different from custodial or long-term care, which Medicare does not cover.
Medicare Part B — Medical Insurance
What Costs Will You Pay with Part B?
Premiums
For the majority of people, Medicare Part B monthly premiums are $185.00 in 2025.
Higher-income seniors may pay what’s known as an income-related monthly adjustment amount (IRMAA) in addition to the standard monthly Part B premium. The total premium, depending on income, varies.
Late enrollment penalties are another potential Medicare Part B cost. If you do not enroll in Part B at age 65 when you become eligible and you are not covered by employer group health coverage and later enroll, you’ll pay an extra 10% above the standard premium cost for every 12 months you delayed enrollment.
What Is Part B Cost Sharing?
Medicare Part B comes with an annual deductible of $257 for 2025. After you meet the deductible for the year, you typically pay 20% of the Medicare-approved amount for doctor services and other Medicare benefits. This holds true if you go to a provider that “accepts assignment.” This means that the provider will accept the Medicare payment amount.
Medicare Part D — Prescription Drug Coverage
What Will You Pay for Part D?
Premiums
The 2025 national base beneficiary premium is $36.78.
As with Medicare Part B, high earners will pay an income-related monthly adjustment amount (Part D IRMAA), additional to premiums.
You may also pay a late enrollment penalty if you delay joining when you’re first eligible and you don’t already have prescription drug coverage.
What Is Part D Cost Sharing?
Part D deductibles vary among plans. However, the maximum deductible allowed is $590 in 2025.
Part D and Medicare Advantage plans with prescription drug coverage almost always charge a copayment or coinsurance for each of the medicines you purchase. Part D coverage uses a tiered cost-sharing structure. This means you will pay varying prices for different categories of drugs. In general, you’ll pay more in copays or coinsurance for brand-name drugs and less for generics.
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Our mission is to provide information that will help everyday people make better decisions about buying and keeping their health coverage. Our editorial staff is comprised of industry professionals and experts on the ACA, private health insurance markets, and government policy. Learn more about our content.
