I'm confused about all these different Medicare costs - premiums, deductibles, copays. How do they all work together?

Question

Diana Garner · Accepted Answer

All parts of Medicare have some cost associated, whether it be a premium, deductibles, copays for services, or even a max out-of-pocket.

Premiums are the payments you make for the coverage. Deductibles are the amount you must pay out-of-pocket before your coverage will pay anything. Copays are the amount you pay for specific services after meeting your deductible.

Medicare Part A is free once you retire if you or your spouse worked for the last 40 quarters (10 years) before you signed up, because you paid taxes while working. Medicare Part A:
     * Has a deductible for each benefit period (every 60 days) for inpatient hospital stays. 
     * Has copays for hospital stays longer than 60 days. 
     * Has daily coinsurance for days 61-90 and 91-150. 

Medicare Part B has a premium that comes out of your Social Security check before it is dispersed to you. If you are not receiving Social Security, you must pay the premium for Part B out-of-pocket until you start drawing your Social Security. Medicare Part B:
     * Has an annual deductible. 
     * Does not have copays for most services. 
     * Has a 20% coinsurance for most services after the deductible is met. 

Medicare Supplements (Medigap) provide benefits to help cover out-of-pocket costs like deductibles, coinsurance, & copays. Each Med Sup has a premium, & each one has different benefits. Medigaps:
     * Help pay the 20% coinsurance for services covered by Original Medicare Part B (medical insurance). 
     * Many cover the Medicare Part A (hospital insurance) deductible.
     * May cover additional days in the hospital after Medicare benefits are used up. 
     * Some may cover costs for skilled nursing facilities, hospice care, excess charges from non-participating providers, & foreign travel health care emergencies. 

Medicare Advantage usually does not have premiums, but may have a deductible(s), has copays for services, & an annual max out-of-pocket.

Norman Smith · Answer

Premiums are like a car payment. It’s what it costs to keep a policy in place.
Deductibles are the amount you need to pay out of pocket BEFORE your benefits take place. And Co-Insurance or Co-Pays are the required payment directly to the functionary that keeps the insurance rates lower for the insured. It seems a little redundant I know, but little things like a Co-pay sometimes stop the abuse of the system once someone has met their deductible.

Nikki Rowland · Answer

Medicare costs come in a few parts. Premiums are what you pay each month just to have coverage. Deductibles are the amount you pay out of pocket before Medicare starts helping. Then, for most services, you’ll still have copays or coinsurance, which is your share of the cost. A supplement or Medicare Advantage plan can help reduce these out-of-pocket costs.

Answered by Nikki Rowland on May 5, 2025

Broker Licensed in SC & NC

Answered by Nikki Rowland Medicare Insurance Agent

Steven Bleicher · Answer

There are professional Medicare agents who are trained to teach prospects about our quirky healthcare system. I will never understand how folks who are about to become Medicare-eligible seemingly refusing to speak with a minimum of 2-3 experienced agents?!? With that # of interviews, you should receive a well-rounded review! Moreover, you will have established a relationship with an expert with whom you continue to work with as you age. He/she is going to be vital cog for all of your future health needs! Please be sure not to talk to a “captive agent” who is affiliated with only one insurance company as that agent can only offer 1 firm's options! That means that only an independent agent, a.k.a., a broker can write a wide range of Medicare-compliant plans.

Answered by Steven Bleicher on May 24, 2025

Broker Licensed in AZ

Answered by Steven Bleicher Medicare Insurance Agent

DeeDee Whitlock · Answer

My best advice is to meet with a local agent who specializes in ALL Medicare products and is referred to you by your doctors office or a friend who has good knowledge of that agents reputation

Don Golding · Answer

Premiums are payments for a policy; they do not count towards a deductible or a maximum out-of-pocket expense. Most people will pay the Medicare Part B premium. There may be additional premiums based on the type of additional policies a beneficiary has enrolled in.

Deductibles are the money you pay before a plan pays for services.  Generally, these payments count towards your maximum out-of-pocket.

Copays (and co-insurances) are the costs of your services and count toward your maximum out-of-pocket.

You can find specific amounts in your plan's summary of benefits document.

Fred Manas · Answer

Medicare costs work together in a tiered system. You pay a monthly premium to keep your coverage active, plus you may have to pay a deductible before insurance kicks in. After the deductible, you'll likely pay a copay or coinsurance for each service. 
Elaboration:
Premiums:
These are the monthly fees you pay to maintain your Medicare coverage, both for Part A (hospital) and Part B (medical). 
Deductibles:
Before Medicare begins to pay for services, you'll usually have to pay an annual deductible for Part A and Part B. For example, in 2025, the Part A deductible for hospital stays is $1,676. 
Copays:
These are fixed amounts you pay for specific services, like a doctor's visit or a prescription. For example, you might pay $20 for a doctor's visit or $30 for a prescription. 
Coinsurance:
This is a percentage of the cost you pay for services after you've met your deductible. For example, you might pay 20% of the cost of a hospital stay after you've paid your deductible. 
How they work together:
Pay Premiums: You pay monthly premiums to ensure your Medicare coverage is active.
Meet Deductible: Before Medicare pays for most services, you'll need to meet an annual deductible.
Pay Copays/Coinsurance: After meeting the deductible, you'll pay copays (fixed amounts) or coinsurance (a percentage) for each service. 
In simpler terms:
Think of it like car insurance. You pay a monthly premium to keep your coverage active. If you get in an accident, you pay a deductible before your insurance kicks in to cover the rest of the repair costs. Similarly, with Medicare, you pay monthly premiums, meet a deductible, and then pay copays or coinsurance for your healthcare.

Gary Henderson · Answer

This requires a conversation. Get in touch with me.

Steve Brauer · Answer

The "premiums" are what people pay each month, no matter if you use the Medicare plan or not. That is the cost of having the plan. Some plans have a "deductible" which means that when you receive covered services, you will pay towards the deductible first, before you realize any "benefit" on the plan. The copays are pre determined costs that you'll pay for certain services, based on your plan.

Answered by Steve Brauer on April 14, 2025

Broker Licensed in AZ & CA

Answered by Steve Brauer Medicare Insurance Agent

Marcie Barnes · Answer

It would be better explained by a licensed professional agent.

My name is 940-395-6572 and my name is Marcie Barnes.  I would be happy to break everything down in simple terms for you

Toni Chavez · Answer

Thanks for your question!

Yes,  this can be very confusing and I’ll simplify it the best I can.

If you have a Medicare Advantage plan (Part C), there’s a max out-of-pocket limit — once you hit it, the plan covers 100% of your approved medical costs for the rest of the year.

What counts toward it: things like copays, coinsurance, deductibles, ER visits, hospital stays, and specialist visits.

What doesn’t count: your monthly premiums, prescription drug costs, or extras like dental and vision.


If you have a PPO plan out of network may have a seperate out of network Max out of pocket.  


Your max out of pocket for prescription drugs for 2025 is $2,000.

Sam Silva · Answer

Premiums keep your coverage active.

Deductibles are what you pay first before Medicare kicks in.

Copays/coinsurance are your share of the cost after that.

Charles Borg · Answer

Ask an agent who knows about Medicare. Don’t rely on what you see on TV or the internet. It always makes sense to go to a professional.

Aisha Saleem · Answer

Premiums are what you pay for the plan each month. Deductibles are the amount that you're responsible for before you begin paying copay prices. Copays are the fixed amount that is your responsibility to pay for a visit or service.

Answered by Aisha Saleem on June 1, 2025

Agent Licensed in MD & FL

Answered by Aisha Saleem Medicare Insurance Agent

Robert Rowe · Answer

Premiums are the monthly/quarterly/Annual costs for your insurance coverage. Deductibles are the cost amount you typically have to play before receiving full coverage for covered costs. Copays is just what it sounds like it is a cooperated payment between the insured (client) and the insurance for a given medical bill (typically drugs, specialist visits and outpatient surgeries).

Answered by Robert Rowe on May 12, 2025

Broker Licensed in MI

Answered by Robert Rowe Medicare Insurance Agent

Ellen Diehl · Answer

Are you turning 65 soon?  If so I can walk you through all of it.  If you are already on an Advantage plan, you are stuck.

Sophia Davis · Answer

Think of it like this... Premium= What you pay monthly in order to have access. Just like you pay monthly to have Netflix or Hulu. Deductible= What you have to pay first. Kind of like when your parents said "If you can save $1,000 towards your first car, we'll help you with the rest (limitations apply)" Copay= A set dollar amount you pay for a certain service. It's like Pay-Per-View. You have the monthly service but some things you just have to pay a little more when you want to use them.

Answered by Sophia Davis on April 16, 2025

Broker Licensed in OH & PA

Answered by Sophia Davis Medicare Insurance Agent

Dominic Javier · Answer

The premiums are the periodic payments (monthly, quarterly or annual) the beneficiary pays without fail to maintain an ongoing Medicare plan. The deductibles are the maximum payment the benficiary have to pay initially per benefit period before Medicare benefits starts. And, copay synonymous to coinsurance are additiinal payments you'll have to make usually after enjoying the benefit. These cost components play along with the type of plan you have and will vary based on each amount of the cost element.

Answered by Dominic Javier on April 29, 2025

Broker Licensed in TX

Answered by Dominic Javier Medicare Insurance Agent

Christine Itami · Answer

This question is multi-faceted and is difficult to answer without speaking to the person and know their particular situation. One must evaluate the needs of the client before trying to explain costs, deductibles, and copays without talking about plan selection. I won't go into much detail, but if someone wants to meet or talk by phone I would be happy to review the answers to all of these questions after I do a needs analysis.

Answered by Christine Itami on May 19, 2025

Broker Licensed in AZ, FL, ID & 5 other states

Answered by Christine Itami Medicare Insurance Agent

Jacquie Wolf · Answer

Premiums are the monthly cost for whichever plan you choose. 
Deductibles are the amount you have to pay before the plan you enroll in begins to pay. Not all plans have deductibles and not all deductibles apply to all services.
Copays are the dollar amounts you have to pay your providers.
Coinsurance is the percentage you have to pay your providers. This is one or the other, not both.
Examining your needs and budget is the best way to make a choice!

I'm confused about all these different Medicare costs - premiums, deductibles, copays. How do they all work together?

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