Medicare Parts A and B—also known as “original Medicare”—serve as the foundation of health care coverage for millions of older Americans, providing essential benefits for hospital care, doctor visits, and more. But understanding your out-of-pocket costs for original Medicare isn’t always easy. Below, we explore the costs associated with Part A and Part B, what they cover, and the various factors that can impact your out-of-pocket expenses.

Medicare Part A: Hospital Insurance

Part A is often called hospital insurance because it pays for your care while you're admitted as an inpatient at the hospital. It also pays some costs outside a hospital, such as skilled nursing facility stays, home health care, and hospice care.

Part A Premium: In most cases, you will not pay a monthly premium for Medicare Part A because you (or your spouse) paid it while working (via the FICA deduction from a paycheck). This is often called “premium-free Part A.” Beneficiaries with premium-free Part A worked and contributed to the Part A Trust Fund a minimum of 40 working quarters or credits (about 10 years).

Beneficiaries who did not contribute enough credits can buy Part A, often called “premium Part A.” In 2024, those with premium Part A will pay either the full premium or a prorated amount (between $278 and $505 per month).  

NOTE: If you have limited income and resources, you may be eligible for the Qualified Medicare Beneficiary program (QMB), one of the Medicare Savings Programs. QMB pays the Part A premium in addition to the cost-sharing and Part B premium.

Part A Deductible: The deductible is the amount you pay before Medicare begins to pay its share. The Part A deductible for an inpatient hospital stay is $1,632 in 2024. The Part A deductible is not an annual deductible; it applies for each benefit period. A benefit period begins at hospital admission and ends when you've been out of the hospital or skilled nursing facility (SNF) for 60 consecutive days. That means you may have multiple benefit periods requiring payment of the Part A deductible multiple times in a year.

Hospital Copayment/Skilled Nursing Facility Copayment: A copayment applies to long hospital stays (60 days or more) and to skilled nursing facility (SNF) stays (after a three-night, Medicare-covered inpatient hospital stay). The copayment amounts vary based on the length and location of the stay.

Hospice Care: There is no deductible or copayment for hospice care, only minimal costs for medications and inpatient respite care.

Home Health Care: There is no deductible or copayment for home health care, as long as you meet the eligibility criteria for coverage.

Medicare Part B: Medical Insurance Medicare

Part B helps pay for health care services such as:

• Doctor visits
• Preventive benefits
• Hospital outpatient surgery and care
• Ambulance services
• Outpatient mental health services
• Durable medical equipment
• Home health care (not covered by Part A).

Part B Premium: In 2024, most beneficiaries will pay $174.70/month for Part B. However, certain people pay more for their Part B premiums because they are subject to income-related monthly adjustment amounts (IRMAA) rules. IRMAA applies to people whose modified adjusted gross income on their 2022 tax returns was more than $103,000 per individual or $206,000 for a couple.

Other Costs in Part B: In addition to the Part B premium, there are out-of-pocket costs you pay when you receive services covered by Medicare Part B. And these costs, like the Part B premium, can change each year.

Part B Annual Deductible: Before Medicare starts covering the costs of your care, you must pay an amount called a deductible. In 2024, the Part B deductible is $240.

After the deductible has been paid, Medicare pays most (generally 80%) of the approved cost of care for services under Part B while you pay the remaining cost (typically 20%) for services such as doctor visits, outpatient therapy, and durable medical equipment (e.g., wheelchairs, hospital beds, home oxygen equipment, diabetes supplies).

Medicare has strict rules on what durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) are covered. It is important to understand Medicare’s “reasonable and medically necessary” rule or you could end up paying more for DMEPOS. Medicare also has an approved list of DMEPOS suppliers.

Preventive Benefits: There are some services under Part B that Medicare covers at 100% such as certain preventive benefits. See Medicare.gov for more information on these services.