“How much is it?” “How do people afford this?” “I got a bill for $19,000.” — three real lines from my calls, and together they explain why this article exists. Medicare's costs aren't one number. They're five or six numbers, and the ones the commercials never mention matter most.
Here’s every place money changes hands in Medicare — what’s fixed, what varies, and where the surprises hide.
Part A: usually free, not always finished
If you or your spouse paid Medicare taxes for about 10 working years, Part A costs nothing monthly. But “premium-free” isn’t “cost-free”: hospital stays carry a deductible per benefit period, and extended stays add daily coinsurance. This is one of the gaps the two paths below handle very differently.
Part B: the fixed monthly cost — with an income twist
The standard 2026 Part B premium is $202.90 a month, deducted from Social Security for most people. Higher earners pay more through IRMAA — an income-based surcharge keyed to your tax return from two years ago. That two-year lookback trips up new retirees constantly: your first Medicare year can be priced off your last full working year. (If your income dropped because you retired, you can appeal — a form, not a miracle, and worth doing.)
The fork decides the rest of your costs
On Medicare Advantage: plan premiums are low (often $0), and you pay as you go — copays for visits, coinsurance for bigger care — protected by an annual in-network out-of-pocket maximum. That maximum is the single most ignored number in Medicare: across plans in the same county it commonly ranges from around $4,000 to $9,000+. A “free” plan with a high maximum is a specific bet about your health year.
On Original Medicare + Medigap: you pay a real supplement premium every month, plus a separate Part D premium — and in exchange, most deductibles and the 20% coinsurance are absorbed. Predictable, flexible, and never free.
“That's just too high.” — sometimes said about a $180 supplement premium by someone who later spent more than that in copays. Compare total expected costs, not sticker prices.
Drug costs: better news than you've heard
Part D premiums vary by plan, deductibles run up to $615 in 2026, and each plan prices your specific medications differently — which is why the cheapest premium is often not the cheapest plan. The genuinely good news: annual out-of-pocket drug costs are now capped ($2,100 in 2026), so the catastrophic drug years of the past are gone.
How to actually budget
Add up your world both ways: premiums you’d pay in a normal year, plus what a bad year would cost (the out-of-pocket maximum on one path, the deductibles-plus-premiums on the other), plus your actual prescriptions priced on the actual plans. That’s a ten-minute exercise with the right tools — and it beats every rule of thumb ever printed.
Where to go from here
Schedule a free Medicare consultation — a conversation about your doctors, prescriptions, and timeline, not a pitch. Want the full picture first? Get the free digital edition of my book, 64+. Or search the plans available at your zip code yourself.
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Written and reviewed by Michael Smith, licensed insurance broker, founder of Guardian Health & Wealth, an independent Medicare agency serving clients nationwide, and author of 64+: Your Ultimate Guide to Medicare & Retirement Planning.
We do not offer every plan available in your area. Currently we represent organizations which offer products in your area. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program (SHIP) to get information on all of your options.