Where your Medicare costs actually come from

Medicare has four parts, and each one charges you differently. Part A covers hospital stays and is free for most people at 65. Part B covers doctor visits and outpatient care — it costs about $165 a month in 2024, though the amount changes yearly. Part D is prescription drug coverage and varies by plan. Part C, called Medicare Advantage, is an alternative to Parts A and B run by private insurers.

Beyond the monthly premium, you also pay a deductible (the amount you cover before Medicare pays), copayments (a fixed amount per visit), and coinsurance (a percentage of the cost). These out-of-pocket costs add up fast if you see doctors often or take multiple medications. The goal of lowering costs is to reduce what you actually pay in premiums, deductibles, and copayments combined.

Your total cost depends on which plan you choose, which doctors you see, which drugs you take, and how much care you use. There is no single "lowest cost" plan for everyone — the right choice depends on your specific situation.

Key Takeaways

  • Medicare Advantage plans often have lower or zero premiums and lower deductibles than Original Medicare, but limit you to in-network doctors and require referrals for specialists.
  • Medigap (supplemental insurance) covers the copayments and coinsurance that Original Medicare leaves you paying, and costs $100 to $300 a month depending on the plan letter.
  • Extra Help and Medicaid can cover your Part D drug costs and Part B premiums if your income is below certain thresholds, and you can check your status without filling out a full form.
  • Switching plans during the annual enrollment period (October 15 to December 7) costs nothing and can save hundreds of dollars a year if your doctors or medications have changed.
  • Preventive care visits, screenings, and vaccines are fully covered at no cost under Medicare, and using them can prevent expensive treatments later.

Medicare Advantage versus Original Medicare plus Medigap

The biggest cost decision is whether to stay with Original Medicare (Parts A and B) or switch to a Medicare Advantage plan. Original Medicare lets you see any doctor who accepts Medicare, but you pay a deductible, copayments, and coinsurance for each visit. A Medigap policy (supplemental insurance) covers most of those out-of-pocket costs, but adds another monthly premium on top of your Part B premium.

Medicare Advantage plans are sold by private insurers like UnitedHealth, Humana, and Anthem. They usually charge zero or low premiums, have lower deductibles, and cap your total out-of-pocket costs at around $7,000 a year. The trade-off is that you must use doctors in the plan's network, and you need a referral to see a specialist. If you travel or see doctors outside the network, you pay more or nothing is covered.

Use this comparison: if you see the same doctors every year and they are in a Medicare Advantage network, Advantage often costs less. If you see many specialists, travel frequently, or want to keep your current doctors without checking a network, Original Medicare plus Medigap may cost less even with the higher premium. Run the numbers for your specific doctors and medications before you decide.

How to cut prescription drug costs under Part D

Part D premiums and copayments vary wildly by plan. A drug that costs $50 a month under one plan might cost $200 under another. The only way to know is to enter your medications into the Medicare Plan Finder tool on Medicare.gov and compare plans side by side.

If you take expensive medications, look for plans with a lower deductible even if the monthly premium is higher — you will hit the deductible anyway and pay less overall. Some plans have $0 deductibles for certain drug categories. Also check whether your drugs are on the plan's formulary (the list of covered drugs) and at what tier — Tier 1 drugs are cheapest, Tier 5 are most expensive.

If you cannot afford your copayments, the Extra Help program (also called Low-Income Subsidy) covers most or all of your Part D costs if your income is below $21,870 a year for an individual or $29,350 for a couple in 2024. You can check whether you may have access to by calling Social Security at 1-800-772-1213 or visiting SSA.gov. You do not have to fill out a full form — Social Security can often determine your status in one call.

Using preventive care to avoid bigger bills later

Medicare covers preventive services at no cost to you — no deductible, no copayment. This includes annual wellness visits, cancer screenings (mammogram, colonoscopy, Pap test), cardiovascular screenings, bone density tests, diabetes screenings, and vaccines (flu, pneumonia, shingles, RSV). Using these services costs you nothing and can catch problems early when they are cheaper to treat.

Many people skip preventive care because they think they cannot afford it, not realizing it is free. If you have not had a colonoscopy in 10 years or a mammogram in 2 years, scheduling one now costs nothing and may prevent a much more expensive diagnosis later. Ask your doctor which screenings you are due for and whether they are covered at no cost.

Switching plans during open enrollment

Every year from October 15 to December 7, you can switch to a different Medicare plan with no penalty. This is the only time you can change plans unless you have a may have access to life event (moving, losing employer coverage, getting married). If your doctor left your plan's network, your medications got more expensive, or a new plan covers your doctors at a lower cost, open enrollment is when you act.

Start by listing your current doctors and medications. Then go to Medicare.gov, click "Find Care Providers" to see which plans include your doctors, and use the Plan Finder to compare costs for your specific medications. Write down the three cheapest plans and call each one to confirm your doctors are in-network and your drugs are covered. Switching takes a few minutes online or by phone, and the new plan starts January 1.

Many people stay in the same plan year after year even though a different plan would cost less. The plan you chose at 65 may not be the cheapest plan for you at 75, especially if your medications or doctors have changed. Checking every year during open enrollment is the single most effective way to lower your costs.

Getting help with premiums and deductibles

If your income is low, you may may have access to for Medicaid (run by your state, not Medicare) to cover your Part B premiums, deductibles, and copayments. Income limits vary by state, but generally you may have access to if you earn less than 135% to 175% of the federal poverty level. In 2024, that is roughly $1,800 to $2,400 a month for an individual, though your state may be higher.

To check whether you may have access to, contact your state Medicaid office. You can find it by searching "[your state] Medicaid" or calling 1-800-MEDICARE (1-800-633-4227) and asking for your state's number. Medicaid can cover costs that Medicare does not, including long-term care, dental, and vision — benefits that vary by state.

If you are 65 or older and your income is below 200% of poverty (about $2,700 a month), you may also may have access to for Pharmaceutical information Programs run by drug manufacturers. These programs provide free or low-cost medications directly. Your doctor or pharmacist can help you find programs for your specific drugs.

Choosing the right Medigap plan if you go that route

If you keep Original Medicare, Medigap (supplemental insurance) covers the deductibles and copayments that Medicare leaves you paying. There are ten standardized Medigap plans labeled A through N. Plan G and Plan N are the most popular because they cover most costs at a lower premium than Plans F or C.

Medigap premiums vary by insurer and your age. A 65-year-old might pay $120 a month for Plan N with one company and $180 with another. Get quotes from at least three insurers before you choose. You can buy Medigap from any insurer, not just the one you use for health insurance.

The best time to buy Medigap is within six months of turning 65 and enrolling in Part B. After that window, insurers can charge you more or deny you based on pre-existing conditions. If you are already past that window, you can still buy Medigap, but expect to pay higher premiums.

Frequently Asked Questions

Can I switch from Medicare Advantage back to Original Medicare?

Yes, but only during the annual open enrollment period (October 15 to December 7) or if you have a may have access to life event. If you switch back to Original Medicare, you have a six-month window to buy Medigap at the standard rate. After that, insurers can charge you more based on your health history.

What if I cannot afford my medications even with Part D?

Check whether you may have access to for Extra Help (call 1-800-772-1213) or a manufacturer information program. If your copayments are still too high, ask your doctor whether a generic or lower-tier drug would work instead. Some plans have $0 copayments for certain drugs if you switch.

Do I have to enroll in Part D when I turn 65?

If you have creditable drug coverage through an employer or union, you can delay Part D without penalty. If you do not have coverage and do not enroll, you pay a penalty (about 1% of the national average premium per month you were late) for as long as you have Medicare. Enroll during your initial enrollment period or during open enrollment to avoid the penalty.

How do I know if my doctor is in a Medicare Advantage network?

Call the plan directly or use the plan's website to search for your doctor by name. Do not assume your doctor is in the network just because they accept Medicare. Some doctors accept Original Medicare but not specific Medicare Advantage plans. Confirm in writing before you switch plans.

What counts as a may have access to life event for switching plans outside open enrollment?

Moving to a new state or county, losing employer coverage, getting married or divorced, and becoming may be able to access for Medicaid all may have access to. You usually have 60 days from the event to switch. Call 1-800-MEDICARE to report the event and see what plans you can switch to.