A Medicare out-of-pocket cost is what you’re obligated to pay beyond what Medicare covers. Your costs will vary based on your plan and the services you receive.
Some plans, like Medicare Advantage (Part C), have an out-of-pocket maximum. This caps your out-of-pocket costs to help protect you from an excessive financial burden.
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How much do Medicare patients pay out of pocket (OOP)? It’s something you might be wondering if you’re age 65+ or about to turn 65. Medicare expenses are a big concern for many older adults, especially those on a fixed or limited income. The first step to understanding Medicare's out-of-pocket costs is to define what "out of pocket" means.
What is a Medicare out-of-pocket cost?
An out-of-pocket cost is the amount you will pay beyond what Medicare covers. You are responsible for part of your medical bill after Medicare kicks in to pay their share. What you’ll pay in out-of-pocket Medicare costs in 2024 will vary based on the coverage you have, what providers you visit, and the services you receive. Certain costs, such as Part B premiums, may depend on how much income you make each year.
What do average Medicare out-of-pocket expenses look like?
Below are some basic Medicare out-of-pocket costs you can expect to pay with various plans. Additional OOP expenses depend on your plan’s coverage and other factors.
- Medicare Part A (Hospital Insurance): Most people don’t have to pay a premium for Part A because they have worked 10+ years and had Social Security taxes withheld. If you don’t get premium-free Part A, you may pay up to $505 monthly in premiums. For a hospital stay in 2024, you also pay a $1,632 deductible per benefit period.
- Medicare Part B (Medical Insurance): The standard Part B monthly premium in 2024 is $174.70. Most beneficiaries pay this amount. The Part B deductible is $240 per year. Part B coinsurance—the share you're expected to pay after reaching your deductible—is 20% of the cost for each Medicare-approved service or item. This can make up a significant part of your total out-of-pocket costs.
- Medicare Advantage (Part C): Part C plans cover everything Original Medicare covers as well as extra benefits such as dental and vision. In 2024, the average Medicare Advantage/Part C premiums are projected to range between $0 and $200+, with the estimated plan premium this year costing $18.50 per month. Most Medicare Advantage plans have cost sharing as well. Typically, this is in the form of a fixed co-payment for doctor's visits (rather than the 20% coinsurance you pay with Part B).
- Medicare Part D (Prescription Drug Coverage): Annual premiums vary across Part D plans, estimated to average around $55.50 per month in 2024 for standard coverage. The Part D deductible can be no more than $545 per year. In 2024, the 5% coinsurance requirement for enrollees in the catastrophic phase will be eliminated. This means Part D enrollees who take high-cost medications covered by Part D could see major savings. Also, Part D plans will pay a larger share of total drug costs above the catastrophic threshold: 20% instead of 15%.
In addition, in 2024, eligibility for the full Medicare Part D Low-Income Subsidy (LIS, or “Extra Help”) will be expanded to beneficiaries with incomes up to 150% of the federal poverty level. LIS lowers premiums and out-of-pocket costs for prescription drugs.
- Medigap (Supplemental Insurance): These policies are sold by private carriers to provide wraparound coverage for Medicare Parts A and B costs. Each insurance carrier sets its own premium for its Medigap policies. The way they set the price determines how much you’ll pay in out-of-pocket costs, now and for the rest of your coverage period.
How does a deductible work?
The Medicare deductible is the annual amount you pay for covered health care services before your Medicare plan starts to pay. Once you've satisfied your deductible, you'll typically only pay a copayment or coinsurance—and Medicare pays the rest. For instance, a hospital stay in 2024 that’s covered under Medicare Part A will cost you $1,632 before Medicare coverage takes effect. Some Medicare Advantage plans have no deductible; however, these plans will likely cost you more in monthly premiums.
What is the Medicare out-of-pocket maximum?
The Medicare out-of-pocket maximum is the annual cap on your out-of-pocket health care costs. This is known as the maximum out-of-pocket (MOOP). Once you reach this limit, you will not be responsible for cost-sharing (deductibles, coinsurance, and copayments) on covered services for the rest of the year. Your MOOP then resets annually. The goal of the MOOP is to protect you from the burden of excessive, out-of-control medical costs that may result from a serious or ongoing health issue.
It's important to know that the Medicare out-of-pocket maximum does not apply to Original Medicare (Parts A and B), which has no annual OOP limit. It only applies to Medicare Advantage plans. The MOOP also applies to Medigap policies.
For 2024, out-of-pocket maximums for Medicare Advantage and Medigap plans are as follows:
Medicare Advantage (Part C): In 2024, the out-of-pocket maximum for Part C plans is $8,850 for approved services, but individual plans can set lower limits if they wish. Part D cost sharing does not apply towards your Medicare Advantage plan’s MOOP.
Medigap (Supplemental Insurance): The 2024 out-of-pocket maximum for Medigap plan K is $7,060. For Medigap plan L, the MOOP is $3,530. After you reach these limits, the plan will pay 100% of your costs for approved services for the remainder of the year.
Medicare Part D plans don't have hard out-of-pocket maximums. However, in all Part D plans, you enter what's called the catastrophic coverage phase after you hit $8,000 in out-of-pocket costs for covered drugs. During this phase, your copays and coinsurance for covered drugs are significantly reduced for the rest of the year.
2024 Medicare out-of-pocket costs at a glance
2024 Out-of-Pocket Costs
Part A (Hospital Insurance)
Premium: $0 for most people; otherwise $278 or $505/mo.
Deductible: $1,632 for each inpatient hospital benefit period
Coinsurance: Varies with location and length of stay. For a hospital stay:
Skilled nursing facility daily coinsurance (days 21-100): $204
*These are called "lifetime reserve days" because Medicare will only pay for these extra days once in your lifetime.
Part B (Medical Insurance)
Premium: $174.70/mo. or higher, depending on income
Deductible: $240 annually
Coinsurance: 20% of service costs; deductible must be met first
Out-of-pocket maximum: None
Preventive benefits: There are some preventive services under Part B that Medicare covers at 100%.
Part C (Medicare Advantage)
Premium: Varies by plan; the average basic monthly premium is estimated to be about $18.50 in 2024
Deductible: Varies by plan, may include Part D deductible
Coinsurance: Varies by plan and service(s) received
Out-of-pocket maximum: $8,850, but some Part C plans set lower limits
Part D (Prescription Drug Coverage)
Premium: Varies by plan; the average basic monthly premium for standard Part D is estimated to be about $55.50/mo. in 2024
Deductible: Varies by plan, but no more than $545 per year
Coinsurance: Varies by plan
Out-of-pocket maximum: None, but catastrophic coverage kicks in after you hit $8,000 in out-of-pocket costs for covered drugs
Medigap (Supplemental Insurance)
Premium: Varies by plan
Coinsurance: Varies by plan
Out-of-pocket maximum: OOP maximums for Medigap Plans K and L are $7,060 and $3,530, respectively
Get trustworthy advice on choosing a Medicare plan
Medicare is not free, and out-of-pocket costs are a major consideration when choosing coverage. That’s why it’s important to take the time to understand all the options available to you. For expert guidance in selecting a plan, you can:
- Contact your State Health Insurance Assistance Program (SHIP).
- Talk to a licensed benefits advisor for free. NCOA only works with brokers that meet our strict Standards of Excellence. These standards are designed to ensure our partners provide clear, accurate, and unbiased advice regarding your Medicare options. You can feel confident the professional you speak with has undergone an intensive training and certification process created by a panel of consumer advisory experts. Their goal is to help you choose the plan that meets your health care and financial situation. A Medicare consultation is 100% confidential and costs you nothing. Start here.
For easier access, download and print our chart for Medicare out-of-pocket costs in 2024.