“How much can I expect to pay out of pocket for Medicare coverage?”

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 (OOP) costs is to define what "out of pocket" means.

"Medicare out-of-pocket costs can change annually, just like your health needs," said Ryan Ramsey, NCOA's Associate Director of Health Coverage and Benefits. "By understanding Medicare out-of-pocket (OOP) costs, you can more effectively plan for your healthcare priorities, manage your budget, and prepare for future medical expenses—avoiding the stress of unexpected costs."

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 costs in 2025 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 $518 monthly in premiums. For a hospital stay in 2025, you’ll also pay a $1,676 deductible per benefit period.
• Medicare Part B (Medical Insurance): The standard Part B monthly premium in 2025 is $185. Most beneficiaries pay this amount. The Part B deductible is $257 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, and most provide extra benefits such as dental, hearing, and vision care. In 2025, the average Medicare Advantage/Part C premiums are projected to range between $0 and $240+, with the estimated average plan this year costing $17 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 $46.50 per month in 2025 for standard coverage. The Part D deductible can be no more than $590 per year. In 2025, the coverage gap will be eliminated, and annual out-of-pocket Part D costs are capped at $2,000. This means if you take high-cost medications covered by Part D, you could see major savings. After meeting the out-of-pocket limit, you pay $0 for covered drugs for the rest of the year. Eligibility for the full Medicare Part D Low-Income Subsidy (LIS, or “Extra Help”) has been expanded to beneficiaries with incomes up to 150% of the federal poverty level (FPL). LIS lowers premiums and out-of-pocket costs for prescription drugs.
• Medigap (Supplemental Insurance): Medigap 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 2025 that’s covered under Medicare Part A will cost you $1,676 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) limit. 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 2025, out-of-pocket maximums for Medicare Advantage and Medigap plans are as follows:

• Medicare Advantage (Part C): In 2025, the out-of-pocket maximum for Part C plans is $9,350 for approved services, but individual plans can set lower limits if they wish. Part D cost sharing does not apply toward your Medicare Advantage plan’s MOOP.
• Medigap (Supplemental Insurance): The 2025 out-of-pocket maximum for Medigap plan K is $7,220. For Medigap plan L, the MOOP is $3,610. After you reach these limits, the plan will pay 100% of your costs for approved services for the remainder of the year.

Starting in 2025, all Part D and Medicare Advantage plans will have a $2,000 annual cap on out-of-pocket prescription drug costs (this cap was previously $8,000). Once you hit this threshold, your costs for covered prescriptions will be $0 for the rest of the year.

2025 Medicare Out-of-Pocket Costs at a Glance

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 advice regarding your Medicare options. You can feel confident the person 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 best meets your health care and financial situation. A Medicare consultation is 100% confidential and costs you nothing. Start here.