About Medicare Coverages & Costs

There are four basic parts of Medicare: A, B, C and D. Each part helps to pay for certain health care services. Each part also has certain costs that you may have to pay. Your Medicare costs will depend on what coverage you choose and on what health care services you use.

Medicare Part A

Medicare Part B

Medicare Part B is medical insurance. It’s one part of what’s often called Original Medicare, which is administered by the federal government. Medicare Part A (hospital insurance) is the other part.Medicare Part B helps pay for care you receive in a clinic or hospital as an outpatient. Part B also covers most doctor services you receive as a hospital inpatient. Most other hospital services are covered by Part A.

What Does Medicare Part B Cover?

Medicare Part B covers doctor visits and most routine and emergency medical services. It also covers some preventive care, like flu shots. The list below shows more examples of what Part B covers.

Medicare Part B covers doctor and outpatient visits and associated services, including:

  1. Doctor visits (including an annual Wellness Visit)
  2. Ambulatory surgery center services
  3. Outpatient medical services
  4. Some preventive care, like flu shots
  5. Clinical laboratory services, like blood and urine tests
  6. X-rays, MRIs, CT scans, EKGs and some other diagnostic tests
  7. Durable medical equipment for use at home, like wheelchairs and walkers
  8. Emergency room services
  9. Skilled nursing care and health aide services for the homebound on a part-time or intermittent basis
  10. Mental health care as an outpatient
What Does Medicare Part B Cost?

Medicare Part B shares some costs with you when you see the doctor or use other medical services. The table below shows the different costs that may apply. Costs shown are for 2019.

Part B charges a monthly premium. The payment is deducted from your monthly check if you receive Social Security benefits. Otherwise you need to send a monthly premium payment to Medicare.


Per month ($135.50 to $460.50 depending on income)


Per year ($185)


Most medical services (20% of the *Medicare-approved amount)

*Medicare-approved amount: The amount Medicare determines to be reasonable for a covered service. Providers who “accept assignment” agree to accept this amount as payment in full. Providers who accept Medicare but not assignment can charge up to 15% above this amount.

Durable medical equipment (20% of the cost Medicare-approved amount)

Outpatient mental health care (20% of the Medicare-approved amount)

How Medicare Part B Cost Sharing Works

Medicare Part B pays 80% of the cost for most outpatient care and services, and you pay 20%. But there is something called “Medicare assignment” that’s important to understand.

Doctors and providers who accept Medicare assignment agree to take what Medicare pays—the Medicare-approved amount—as payment in full. Medicare reduces the approved amount it pays for doctors who don’t accept Medicare assignment. Doctors who don’t accept Medicare assignment may charge more than the Medicare-approved amount. You may have to pay the additional cost, which is called “excess charges.”

Medicare Part C

Medicare Part C is also called Medicare Advantage. It’s an alternative to Original Medicare (Parts A and B).

Medicare Advantage plans are offered by private insurance companies approved by Medicare. You must be enrolled in both Part A and Part B to join a Medicare Advantage plan. You’ll still be in the Medicare program, but you will receive your benefits through the plan instead of through Original Medicare.

What Does Medicare Part C Cover?

Medicare Advantage (Part C) plans combine coverage for hospital care, doctor visits and other medical services all in one plan. Plans are required to provide all of the benefits offered by Medicare Parts A and B (except hospice care, which continues to be provided by Part A). Many plans also provide prescription drug coverage and additional benefits like routine dental and eye care.

What do Medicare Advantage (Part C) plans cover?

  1. Medicare Advantage (Part C) includes all the benefits of Part A, including hospital stays, skilled nursing, home health care and associated services
  2. Medicare Advantage (Part C) includes all the benefits of Part B, including doctors visits, outpatient care, screening and lab tests and associated services
  3. Prescription drug coverage is included in many Medicare Advantage plans
  4. Additional benefits may be included, such as dental eye care, hearing care, wellness services and a nurse helpline
  5. Medicare Advantage plans all have a yearly limit on your out-of-pocket costs for covered medical services. This limit may vary for different Medicare Advantage plans and can change each year
What Does Medicare Part C Cost?

Each Medicare Advantage (Part C) plan sets its own specific costs, but the types of costs they include are similar. The table below shows the types of costs that plans may apply, but you need to look at the details of a particular plan for actual costs.


Per month (Plan premiums vary. You still pay the Part B premium to Medicare and the Part A premium, if you have one).


Per year (Some plans charge an annual deductible, and some don’t. Part A and B deductibles do not apply).


Most medical services, such as doctor visits Many plans charge co-pays for the services and benefits you use.


Select items, such as durable medical equipment (Plans set their own co-insurance terms and percentages).

How Medicare Advantage Cost Sharing Works

Most Medicare Advantage plans use a combination of deductibles, coinsurance and copays to share the cost of the services you use. Cost-sharing usually applies to all of the services the plan covers.

You need to read the details of each individual Medicare Advantage plan to get the full story on its costs. Most plans have network doctors and pharmacies that may offer plan members discounted pricing.

The following stories may help you understand how cost sharing might work with a Medicare Advantage plan in different situations.

Medicare Part D

Medicare Part D is prescription drug coverage. It helps pay for the medications your doctor prescribes.

Original Medicare (Parts A and B) does not cover prescription drugs. Many people who choose Original Medicare add a prescription drug (Part D) plan or choose a Medicare Advantage plan that includes Part D.

In general, you may enroll in a Part D plan if you are entitled to Medicare Part A or if you are enrolled in Medicare Part B. In addition, you must live in the service area of a Part D plan.

What Does Medicare Part D Cover?

Medicare Part D Plans are required to cover certain common types of drugs, but each plan may choose which specific drugs it covers. The drugs you take may not be covered by every Part D plan. You need to review each plan’s drug list, or formulary, to see if your drugs are covered.

Explanation of formulary (in a light box) A list of the prescription drugs that are covered by a specific Medicare Part D plan.

Medicare Part D covers certain prescription drugs

  1. The federal government sets guidelines for the types of drugs Part D plans must cover
  2. Each Part D plan decides which specific drugs it will cover and what premium members will pay
  3. When comparing Part D coverage, check each plan's formulary (drug list) to make sure your drugs are included.

Prescription drug plans do not cover:

  1. Drugs that are not on the plan’s drug list
  2. Drugs that are covered under Part A or Part B
  3. Drugs that are excluded by Medicare
Medicare Prescription Drug Plans (Part D)

You don’t get prescription drug coverage with Medicare Parts A & B alone. Learn about Part D prescription drug plans and when you should enroll to avoid Medicare’s late enrollment penalty.

What Does Medicare Part D Cost?

The insurance companies that offer Medicare Part D drug plans and Medicare Advantage (Part C) plans with drug coverage set their own prices, but the types of costs they include are similar. The table below shows the types of costs that plans may apply. Part D plan premiums and cost sharing can vary widely, even for similar coverage. You need to review plan details carefully.


Per month (Plan premiums vary. You still pay the Part B premium to Medicare and the Part A premium, if you have one).


Per year (Some plans charge an annual deductible, and some don’t).


Most new prescriptions and refills (Some plans charge co-pay each time you fill a prescription).


Some new prescriptions and refills (Some plans charge a percentage of the cost when you fill a prescription).

How Medicare Part D Cost Sharing Works

Medicare Part D has different stages of cost sharing until you reach a set limit on out-of-pocket costs for the year. The limit is $5,100 in 2019. After that, your plan pays most of the cost of your drugs for the rest of the year.

Co-pays, co-insurance amounts and your plan deductible, if any, count as out-of-pocket costs. Premium payments do not.

Part D cost-sharing stages are explained below. The costs shown are for 2019. You may not go through every stage in any given year. If you get Extra Help (link to Get Help Paying for Medicare page) from Medicare for Part D costs, the coverage gap stage doesn’t apply to you.

Additional Info

Medicare Costs To Understand

Medicare helps pay for many health care items and services, but you will have to pay a share of the cost, too. Your Medicare costs include:

  1. Premiums
  2. Deductibles
  3. Co-payments
  4. Co-insurance

You pay premiums outright. Deductibles, co-payments (co-pays) and co-insurance are ways that Medicare shares the cost of your care with you.


A premium is a fixed amount that you pay for the cost of the plan.


A deductible is the out-of-pocket cost due to you prior to your plan paying any cost for health care services.


A co-payment, or co-pay, is a fixed amount you pay at the time you receive a covered service.


Co-insurance is when you and your plan split the cost of a covered service. For example, you might pay 20% of the allowed amount and your plan would pay 80%.

Out-of-Pocket Maximum

The out-of-pocket maximum is the total amount you might pay during a calendar year. The total does not include your premium or the cost of any services that are not covered by your plan. After you reach your out-of-pocket maximum, your plan pays 100% of the allowed amount for covered services for the rest of the year.