Introduction to Medicare
Cost Basics
Medicare isn't free. It's important to pay attention to more than just monthly premiums.
The amount you pay depends on the coverage you choose and the health care services you receive. And don't forget to see if you qualify for help with your Medicare costs.
What is a premium?
A premium is a set amount (often monthly) you must pay for coverage.
Which costs might I share with Medicare or my plan?
Deductible:
This is a set amount that you pay out-of-pocket for covered services before Medicare, your Medicare Advantage plan, and/or your Prescription Drug plan start to pay. If you have a Medicare Supplement insurance plan, this is the amount your plan may help pay after Medicare pays, depending on the plan you choose.
This is a set amount that you pay out of pocket for covered services before Medicare, your Medicare Advantage plan, and/or your Prescription Drug plan start to pay.
1 You pay first, up to the deductible
2 Medicare and/or your plan begins to pay
Depending on the Medicare Supplement insurance plan chosen, this is the amount your plan may help pay after Medicare pays.
Copayment (copay):
A fixed amount that you pay each time you receive a covered service. For example, if you have prescription drug coverage, you might pay $10 each time you fill a certain prescription.
1 You pay a fixed amount
2 Medicare Advantage or Prescription Drug plans: They will be billed for the rest
Coinsurance:
An amount you pay as your share for the cost of a covered service. For example, Medicare Part B pays about 80% of the cost of a covered medical service and you would pay the rest.
Are there plans that limit out-of-pocket spending each year?
It depends on which type of coverage you have.
Original Medicare (Parts A and B):
No.
Medicare Advantage (Part C) plans:
Yes. After you reach the annual out-of-pocket maximum, your plan will pay all your costs for Medicare-covered services for the rest of the period (usually a calendar year). Costs that do not apply to the annual out-of-pocket maximum include premiums, Part D prescription drugs, and extra benefits that are not covered by Original Medicare.
Medicare Prescription Drug (Part D) plans:
No. But the amount you pay for your prescription drugs depends on the drug payment stage you're in.
Annual Deductible
For Part D plans with a deductible, you pay the full cost for drugs until you reach the deductible amount. Then you move to the Initial Coverage stage.
For Part D plans without a deductible, this stage doesn’t apply. Your coverage starts in the Initial Coverage stage.
- $590 is the maximum deductible amount Part D plans can charge in 2025.
Initial Coverage
In this stage, you pay a copay or coinsurance for your prescription drug and the plan pays the rest.
You stay in the Initial Coverage stage until your total drug costs reach $2,000 in 2025.
Catastrophic Coverage
When your out-of-pocket costs reach $2,000 in 2025, you enter the Catastrophic Coverage stage and stay there for the rest of the plan year.
What costs can I expect for 2024?
Depending on which type of coverage you have, your costs may be different.
Original Medicare
To get an idea of 2024 costs, you can visit Medicare costs at a glance on the Medicare.gov website.
Medicare Advantage, Medicare Supplement insurance or Medicare Prescription drug plans:
To get an idea of the out-of-pocket costs for each plan offered by UnitedHealthcare, you'll want to check to see which plans are offered in your area.
What if I need help paying Medicare costs?
You may be eligible for financial assistance to cover your health care expenses—many people who qualify never sign up. So don’t hesitate to apply. Income and resource limits vary by program.
Medicaid:
Provides health care coverage for people and families with limited incomes. It may also include some services not covered by Medicare, like prescription drugs, eye care or long-term care.
Medicare Savings Programs:
Help pay Original Medicare (Parts A and B) premiums, deductibles, and coinsurance. You automatically qualify for the Extra Help program if you qualify for a Medicare Savings Program.
Programs of All-Inclusive Care for the Elderly (PACE):
Combine medical, social and long-term care services for people over the age of 55 who qualify. This program is not available in all states.
Extra Help program:
Helps pay some or all Medicare Part D premiums, deductibles, copays and coinsurance for those who qualify.
Read Next:
Medicare Advantage Plans
See UnitedHealthcare Plans Available in Your Area
Explore the Medicare Advantage, Medicare Prescription Drug and Medicare Supplement plans that may be available in your area. Or learn if you qualify for a Medicare Special Needs Plan.
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AARP® encourages you to consider your needs when selecting products and does not make product recommendations for individuals.
Please note that each insurer has sole financial responsibility for its products.
AARP® Medicare Supplement Insurance Plans
AARP endorses the AARP Medicare Supplement Insurance Plans, insured by UnitedHealthcare Insurance Company.
Insured by UnitedHealthcare Insurance Company, 185 Asylum Street, Hartford, CT 06103 (available in all states/territories except ND, NY) or UnitedHealthcare Insurance Company of America, 1600 McConnor Parkway, Floor 2, Schaumburg, IL 60173 (available in AR, AZ, IL, IN, MS, NC, ND, NJ, OH, PA, SC, TN, TX) or UnitedHealthcare Insurance Company of New York, 2950 Expressway Drive South, Suite 240, Islandia, NY 11749 (for NY residents). Policy Form No. GRP 79171 GPS-1 (G-36000-4).
In some states, plans may be available to persons under age 65 who are eligible for Medicare by reason of disability or End-Stage Renal Disease.
Not connected with or endorsed by the U.S. Government or the federal Medicare program.
This is a solicitation of insurance. A licensed insurance agent/producer may contact you.
You must be an AARP member to enroll in an AARP Medicare Supplement Plan.
THESE PLANS HAVE ELIGIBILITY REQUIREMENTS, EXCLUSIONS AND LIMITATIONS. FOR COSTS AND COMPLETE DETAILS (INCLUDING OUTLINES OF COVERAGE), CALL A LICENSED INSURANCE AGENT/PRODUCER AT THE TOLL-FREE NUMBER ABOVE.
Medicare Advantage plans and Medicare Prescription Drug plans
Plans are insured through UnitedHealthcare Insurance Company or one of its affiliated companies, a Medicare Advantage organization with a Medicare contract and a Medicare-approved Part D sponsor. Enrollment in these plans depends on the plan's contract renewal with Medicare. You do not need to be an AARP member to enroll in a Medicare Advantage plan or Medicare Prescription Drug plan.
This information is not a complete description of benefits. Contact the plan for more information.
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