Costs and Coverage

Part A – Hospital Insurance

• Premium: Most people usually qualify for premium-free Part A if they or a spouse paid Medicare taxes for 10+ years (40 quarters).
• Deductible: A set amount per benefit period ($1,736 in 2026).
• Coinsurance: Daily charges after 60 days in the hospital or 20 days in a skilled nursing facility.

Part B – Medical Insurance

• Premium: Standard monthly premium ($202.90 in 2026), higher for high-income earners (IRMAA).
• Deductible: Annual deductible ($283 in 2026).
• Coinsurance: Typically 20% of the Medicare-approved amount for services.

Part C – Medicare Advantage

• Premium: Vary by plan; you still pay your Part B premium plus your chosen plan’s premium (some can be as low as $0).
• Copays/Coinsurance: Vary by plan and service.
• Out-of-Pocket Maximum: Medicare Advantage plans cap your spending each year which vary by plan.

Part D – Prescription Drug Coverage

• Premium: Varies by plan and income.
• Deductible: Vary by plan; the maximum deductible is set at $615 for 2026.
• Copays/Coinsurance: Depends on plan design and drug tiers in the plan’s formulary.

Out-of-Pocket Limits

Original Medicare (Parts A & B)

• No annual out-of-pocket maximum.
• You pay deductibles, coinsurance, and copays without a cap.

Medicare Advantage (Part C)

• Includes an annual out-of-pocket maximum (set by the plan, capped by Medicare).
• Once you reach this limit, the plan pays 100% of covered services for the rest of the year.
• Provides financial protection not available in Original Medicare.

Medicare Supplement (Medigap) Coverage

What It Is

Private insurance that helps pay costs not covered by Original Medicare (like deductibles, coinsurance, and copays).

Standardized Plans

Medicare Supplement plans are labeled A–N, each offering a specific set of benefits.

Key Benefits

• Predictable costs.
• Nationwide provider access (any doctor who accepts Medicare).
• Some plans cover foreign travel emergencies.

Enrollment Rules

Best time to buy is during your Medigap Open Enrollment Period (6 months after enrolling in Part B at age 65). After that, insurers may deny coverage or charge more based on health history.

Consumer Takeaway

• Original Medicare: Covers hospital and medical care but has no spending cap.
• Medicare Advantage: Bundled coverage with an annual out-of-pocket maximum.
• Part D: Adds prescription drug coverage with its own costs.
• Medicare Supplement (Medigap): Optional supplemental insurance that fills gaps in Original Medicare, making costs more predictable.