One of the most common misconceptions about Medicare is that it is free once you turn 65. It is not. You have been paying into Medicare through payroll taxes your whole working life, and once you enroll, you will still pay premiums, deductibles, and cost-sharing. Here is a complete breakdown of what Medicare actually costs in 2026.

Part A: Hospital Coverage

Most people do not pay a monthly premium for Part A. If you or your spouse worked and paid Medicare taxes for at least 40 quarters (10 years), your Part A premium is $0.

If you have fewer than 40 quarters of Medicare-covered employment, you can still buy Part A. The premium is around $284 per month if you have 30 to 39 quarters, and $518 per month if you have fewer than 30 quarters.

But even with free Part A, there are out-of-pocket costs when you actually use it:

Note that Part A uses "benefit periods" rather than a single annual deductible. A new benefit period starts each time you are admitted to a hospital after being out for 60 consecutive days, which means theoretically you could owe the deductible more than once in a year.

Part B: Medical Coverage

The standard Part B premium in 2026 is approximately $185 per month. This covers outpatient care: doctor visits, lab work, preventive care, durable medical equipment, and more.

Higher earners pay more through what is called IRMAA (Income-Related Monthly Adjustment Amount). The income thresholds in 2026:

IRMAA is based on your income from two years prior, so your 2026 premium is based on your 2024 tax return. If your income has significantly decreased (due to retirement, for example), you can appeal to have your premium adjusted.

Part B also has an annual deductible of approximately $257 in 2026. After that, you typically pay 20% of the Medicare-approved amount for services.

Part D: Prescription Drugs

Part D premiums vary by plan, but the national average runs roughly $35 to $55 per month. Like Part B, higher earners pay an IRMAA surcharge on Part D premiums as well.

Most Part D plans also have a deductible (up to $590 in 2026) and copays or coinsurance that vary by drug tier. The good news is that since 2025, there is a $2,000 annual cap on out-of-pocket drug costs.

Medigap Supplements: Optional but Often Worth It

If you have Original Medicare, you can add a Medigap supplement to cover much of your cost-sharing. Plan G premiums for a 65-year-old typically range from $100 to $175 per month nationally. Plan N runs $30 to $60 less.

With a Plan G policy, your out-of-pocket exposure is essentially just the annual Part B deductible (around $257). That is a dramatic reduction in financial risk for a predictable monthly cost.

What a Typical Monthly Budget Looks Like

Here is what a typical retiree might budget for healthcare coverage under different scenarios.

Original Medicare Only (no supplement): Around $185/month for Part B plus $40/month for a basic Part D plan. Total: roughly $225/month. But you carry significant cost exposure for the 20% Part B coinsurance and Part A deductibles.

Original Medicare plus Plan G plus Part D: Around $185 (Part B) plus $140 (Plan G average) plus $45 (Part D average). Total: roughly $370/month with very low exposure beyond the annual deductibles.

Medicare Advantage: Around $185/month (Part B) plus $0 to $50 for the Advantage plan premium. Total: $185 to $235/month. Lower upfront cost but potential cost-sharing exposure if you need significant care.

Budget planning tip: Medicare costs change every year. The Social Security Administration sends a letter called the Annual Notice of Change each fall detailing your new premiums. Review it when it arrives and compare your Part D plan during open enrollment -- doing so can save hundreds of dollars annually.

Bottom Line

Budget $200 to $400 per month for Medicare coverage depending on which route you take. The cheaper monthly option is not always the lower annual cost once you account for actual healthcare use.

Disclaimer: The information on this site is for educational purposes only and does not constitute legal, financial, or medical advice. Medicare rules and costs change annually. Always verify current information at Medicare.gov or by calling 1-800-MEDICARE. Consider consulting a licensed insurance professional or your State Health Insurance Assistance Program (SHIP) for personalized guidance.