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.

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

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.

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

Gary Henderson · Answer

This requires a conversation. Get in touch with me.

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

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.

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.

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

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.

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

Agent Licensed in OH

Answered by Sophia Davis Medicare Insurance Agent

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

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

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