Costs and Coverage Gaps

Part A (Hospital Insurance)

• Premiums: Usually premium-free if you or a spouse paid Medicare taxes for at least 10 years. If not, the premium can be several hundred dollars.
• 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)

• Premiums: Monthly premium based on income (standard rate is $202.90 for 2026).
• Deductible: Annual deductible ($283 in 2026).
• Coinsurance: Typically 20% of the Medicare-approved amount for services.

Part C (Medicare Advantage)

• Premiums: Vary by plan; you still pay your Part B premium.
• Out-of-Pocket Costs: Copays, coinsurance, and deductibles depend on the plan.
• Maximum Out-of-Pocket Limit: Medicare Advantage plans cap annual spending, unlike Original Medicare.

Part D (Prescription Drugs)

• Premiums: Vary by plan and income.
• Deductible & Copays: Costs depend on the drug tier and plan design.
• Catastrophic Coverage: After a certain spending threshold, beneficiaries may pay more until catastrophic coverage starts.

Coverage Gaps in Medicare

• Prescription Drugs: Original Medicare (Parts A & B) does not cover medications—Part D or Medicare Advantage plans that include Part D is necessary for drug coverage.
• Dental, Vision, and Hearing: Not covered under Original Medicare. Some Medicare Advantage plans include these benefits.
• Long-Term Care: Custodial care in nursing homes or assisted living is not covered.
• Out-of-Pocket Costs: No annual spending cap under Original Medicare; costs can add up.
• Foreign Travel: Care outside the U.S. is typically not covered.

Consumer Takeaway

Medicare is essential but not comprehensive. Beneficiaries should expect:

• Premiums, deductibles, and coinsurance
• Coverage gaps (prescriptions, dental, vision, hearing, long-term care)
• Potentially high out-of-pocket costs without supplemental coverage

Many people fill these gaps with Medicare Supplement (Medigap) policies or Medicare Advantage plans, which offer additional benefits and financial protection.

Get Help Enrolling

Connecting with a licensed agent can:

• Discuss Medicare options with you
• Help you understand the different Medicare components
• Compare plans to find the best fit for your budget and needs