Understanding Medicare costs

It’s important to budget for out-of-pocket Medicare costs. The following sections describe those costs in more detail so that you can prepare and select a plan that fits your needs.

What does Medicare cost?

In general, there is a monthly premium for Medicare coverage and fees for care received. There are various out-of-pocket costs associated with Medicare Parts A, B, C and D. 

Part A

Part A pays for services received if you stay in a hospital to receive care. Most do not need to pay monthly premium for Part A, such as if you or your spouse paid Medicare taxes for at least 10 years while working. You will need to help cover the cost of some fees when you receive care. These expenses come in the form of deductibles and copayments.

If you are admitted to the hospital, you should expect to pay the following:

  • A deductible is the amount you pay before your insurance pays.
  • For Part A (hospitalization), the deductible is $1,632 per benefit period.1

Coinsurance for Part A

Coinsurance is the percentage of your medical bill that you pay until your deductible has been met. For Part A, coinsurance is a set dollar amount that you pay for covered days spent in a hospital. Below are the Part A coinsurance amounts:

  • Days 1–60: $0
  • Days 61–90: $408 per day
  • Days 91 and on: $816 per day, until you have used up your lifetime reserve days. You get 60 reserve days over the course of your life.
  • Skilled nursing facility coinsurance: Up to $204.00 per day for days 21-100 per benefit period.

If your time in the hospital exceeds your number of reserve days, you will pay your remaining hospital expenses. 


Part B

Part B pays for doctor’s services and outpatient hospital services. Part B covers necessary medical treatments and preventative healthcare services. You pay a monthly premium for this coverage, which can be automatically taken out of your Social Security benefits.

Most pay a standard monthly premium, which is set each year. In 2024, the standard monthly Part B premium amount is $174.70 ($2,096.40 per year). If you earn over $97,000 a year, you will pay a higher premium. If the premium is deducted from your Social Security benefits, you will pay a lower premium.

Medicare Part B deductible

With Medicare Part B, you have a set deductible. For 2024, the Medicare Annual Part B deductible is $240.00, which you pay only once a year. After your deductible is met, you typically pay about 20% of the following:

  • Most doctor services
  • Durable medical equipment (DME)
  • Outpatient therapy

Part C

Part C is Medicare Advantage Plans and the out-of-pocket costs can vary. Medicare Advantage Plans typically function like an HMO or PPO plan with common out-of-pocket costs such as:

  • Monthly premiums
  • Annual deductible
  • Copayments 

Part D

Medicare Part D provides standalone coverage for your prescriptions and can save you money in the long run. The out-of-pocket costs you can expect with Medicare Part D include:

  • Monthly premium
  • Annual deductible
  • Set amount (copay) or set percentage (coinsurance) for each prescription
  • Catastrophic coverage in Part D for 2024 is $8,000
    • Once you have paid $8,000 in medications, your costs for medications will be $0.  

Get more information

Connect with us

Get answers to your Medicare questions. Call a Blue Shield Medicare adviser at (800) 260-9607 (TTY: 711) or book an appointment online.

Book an appointment

Join a Medicare event

Attend a free live or online seminar to learn more about Medicare and get your questions answered. 

Find an event

Download a free booklet*

Get a free copy of Your Guided Path to Medicare to understand your coverage options. 

Get your guide

1 Original Medicare measures your use of hospital and skilled nursing facility (SNF) services by “benefit periods.” A benefit period begins the day you’re admitted as an inpatient in a hospital or SNF. The benefit period ends when you haven’t gotten any inpatient hospital care (or skilled care in an SNF) for 60 days in a row. If you go into a hospital or SNF after one benefit period has ended, a new benefit period begins. You must pay the inpatient hospital deductible for each benefit period. There’s no limit to the number of benefit periods. This amount may change effective January 1, 2024.

Y0118_23_379A3_M Accepted 06172024
H2819_23_379A3_M Accepted 06172024

Page last updated: 07/02/2024

*Free copy with no obligation to enroll.

© California Physician’s Service DBA Blue Shield of California 1999-2024. All rights reserved.

California Physician’s Service DBA Blue Shield of California is an independent member of the Blue Shield Association.

Blue Shield of California 601 12th Street, Oakland, CA 94607.

For Blue Shield Medicare Advantage Plans: Blue Shield of California is an HMO, HMO D-SNP, PPO and a PDP plan with a Medicare contract and a contract with the California State Medicaid Program. Enrollment in Blue Shield of California depends on contract renewal.

The company complies with applicable state laws and federal civil rights laws and does not discriminate, exclude people, or treat them differently on the basis of race, color, national origin, ethnic group identification, medical condition, genetic information, ancestry, religion, sex, marital status, gender, gender identity, sexual orientation, age, mental disability, or physical disability. La compañía cumple con las leyes de derechos civiles federales y estatales aplicables, y no discrimina, ni excluye ni trata de manera diferente a las personas por su raza, color, país de origen, identificación con determinado grupo étnico, condición médica, información genética, ascendencia, religión, sexo, estado civil, género, identidad de género, orientación sexual, edad, ni discapacidad física ni mental. 本公司遵守適用的州法律和聯邦民權法律,並且不會以種族、膚色、原國籍、族群認同、醫療狀況、遺傳資訊、血統、宗教、性別、婚姻狀況、性別認同、性取向、年齡、精神殘疾或身體殘疾而進行歧視、排斥或區別對待他人。