Quick Answer
Medicare has four main types of out-of-pocket costs: premiums (monthly fee to have coverage), deductibles (amount you pay before Medicare starts), copays (fixed dollar amount per service), and coinsurance (percentage of the cost). In 2026, Part B coinsurance is 20% after a $257 deductible. Original Medicare has no out-of-pocket maximum.
Coverage Comparison by Plan Type
| Plan Type | Coverage | Notes |
|---|---|---|
| Premium | Monthly fee to maintain coverage | Part B: $185/month in 2026; deducted from SS check |
| Deductible | Amount you pay before Medicare pays | Part B: $257/year; Part A: $1,676/benefit period in 2026 |
| Copay | Fixed dollar amount per service | Common in MA plans: $10–$50 per PCP visit |
| Coinsurance | Percentage of the cost you pay | Part B: 20% after deductible; Medigap Plan G covers this |
Understanding Your Coverage Options
Premiums
A premium is the monthly fee you pay to maintain Medicare coverage. Part A is free for most people (40+ quarters of Medicare taxes). Part B costs $185/month in 2026. Part D and Medigap premiums vary by plan.
What It Covers
- Part A: $0/month if you have 40+ quarters of Medicare taxes
- Part A: $285/month (30–39 quarters) or $518/month (under 30 quarters) in 2026
- Part B: $185/month standard premium in 2026
- Part D: Varies by plan; average ~$46/month in 2026
- Medigap: Varies by plan and age; Plan G typically $100–$200/month
- IRMAA surcharges apply to Part B and Part D for higher-income beneficiaries
What It Doesn't Cover
- Premiums do not count toward your deductible
- Premiums do not count toward your out-of-pocket maximum
- Missing premium payments can result in loss of coverage
Part B Giveback
Some Medicare Advantage plans offer a 'Part B Giveback' benefit that reduces your Part B premium by up to $185/month. About 25% of MA plans offered this in 2026.
Deductibles
A deductible is the amount you pay out-of-pocket before Medicare starts paying. The Part B deductible is $257/year in 2026. The Part A deductible is $1,676 per benefit period - not per year.
What It Covers
- Part A deductible: $1,676 per benefit period in 2026 (not per year)
- Part B deductible: $257 per year in 2026
- Part D deductible: Up to $590/year in 2026 (varies by plan)
- After meeting the deductible, Medicare pays its share of covered services
- Medigap Plan G covers the Part A deductible; Plan F covers both A and B deductibles
What It Doesn't Cover
- Part A benefit period resets with each hospitalization after 60 days
- Part B deductible applies to all outpatient services each calendar year
- Part D deductible applies before the plan pays for drugs
Part a Benefit Period Warning
The Part A deductible is per benefit period, not per year. If you're hospitalized, discharged for 60+ days, and then hospitalized again, a new $1,676 deductible applies. There is no limit to how many benefit periods you can have.
Coinsurance
Coinsurance is the percentage of the Medicare-approved amount you pay after meeting your deductible. Part B coinsurance is 20% - meaning Medicare pays 80% and you pay 20% of covered services.
What It Covers
- Part B: 20% of the Medicare-approved amount after the $257 deductible
- Part A hospital days 1–60: $0 coinsurance
- Part A hospital days 61–90: $419/day coinsurance in 2026
- Part A hospital days 91+: $838/day (lifetime reserve days) in 2026
- Skilled nursing facility days 21–100: $209.50/day coinsurance in 2026
What It Doesn't Cover
- Original Medicare has NO out-of-pocket maximum - coinsurance can be unlimited
- Medigap is the main way to cap coinsurance costs
- Medicare Advantage plans have an annual OOP maximum ($9,350 in 2026)
Copays
A copay is a fixed dollar amount you pay for a specific service, regardless of the total cost. Copays are common in Medicare Advantage plans. Original Medicare uses coinsurance (20%), not copays.
What It Covers
- Common in Medicare Advantage plans: fixed amounts per visit or service
- PCP visit: typically $0–$20 in MA plans
- Specialist visit: typically $30–$50 in MA plans
- Emergency room: typically $90–$120 in MA plans
- Part D copays: vary by drug tier (generic, preferred brand, non-preferred, specialty)
- Urgent care: typically $40–$65 in MA plans
What It Doesn't Cover
- Original Medicare does not use copays - it uses coinsurance (20%)
- Copays count toward the MA plan's annual out-of-pocket maximum
- Copays do not apply to Original Medicare services
2026 Medicare Cost-Sharing Quick Reference
| Cost Item | Amount (2026) | Type | How to Reduce |
|---|---|---|---|
| Part B Premium | $185.00/month | Premium | MSP, Part B Giveback, IRMAA appeal |
| Part A Premium | $0 (40+ quarters) | Premium | N/A if premium-free |
| Part B Deductible | $257/year | Deductible | Medigap Plan F (pre-2020 enrollees) |
| Part A Deductible | $1,676/benefit period | Deductible | Medigap Plan G |
| Part B Coinsurance | 20% after deductible | Coinsurance | Medigap Plan G |
| Part A Days 61–90 | $419/day | Coinsurance | Medigap Plan G |
| SNF Days 21–100 | $209.50/day | Coinsurance | Medigap Plan G |
| Part D Deductible | Up to $590/year | Deductible | Extra Help, low-deductible plans |
| MA PCP Visit | $0–$20 typical | Copay | Choose $0 copay plans |
| MA OOP Maximum | $9,350 in-network | Annual Cap | Choose lower OOP max plans |
✦ Important Exceptions
Original Medicare Has No OOP Maximum
Unlike Medicare Advantage, Original Medicare has no annual cap on out-of-pocket costs. A serious illness could result in unlimited coinsurance. Medigap is the primary protection against this.
Preventive Services are $0
Many preventive services (Annual Wellness Visit, flu shots, mammograms, colonoscopies) are covered at $0 coinsurance under Part B when performed by a participating provider.
Part D $2,000 Out-of-Pocket Cap
Starting in 2025, Part D has a $2,000 annual out-of-pocket cap on drug costs. Once reached, you pay $0 for covered drugs for the rest of the year.
Medigap Standardization
Medigap plans are standardized by letter (A, B, C, D, F, G, K, L, M, N). Plan G is the most comprehensive for new enrollees and covers the Part A deductible and the 20% Part B coinsurance.
✦ 2025–2026 Legislative Updates
Part D $2,000 OOP Cap
PassedThe Inflation Reduction Act capped Part D out-of-pocket drug costs at $2,000/year starting in 2025.
Part B Premium to $185
PassedThe 2026 Part B premium increased from $174.70 to $185/month.
Part B Deductible to $257
PassedThe 2026 Part B deductible increased from $240 to $257.
Part a Deductible to $1,676
PassedThe 2026 Part A hospital deductible increased from $1,632 to $1,676 per benefit period.
Cost-Sharing Reduction Checklist
Cost-Sharing Reduction Checklist
- Check if you qualify for a Medicare Savings Program (MSP) to have the state pay your Part B premium
- Apply for Extra Help (LIS) to reduce Part D premiums, deductibles, and copays
- Consider Medigap Plan G to cover the Part A deductible and 20% Part B coinsurance
- Compare Medicare Advantage plans with low copays and a low annual OOP maximum
- Appeal IRMAA surcharges if you had a qualifying life event (retirement, divorce, death of spouse)
- Use the $2,000 Part D OOP cap to your advantage - high-cost drug users benefit most
- Take advantage of $0 preventive services under Part B
✦ Frequently Asked Questions
David Haass
AuthorDavid Haass is a licensed Medicare expert and member of the Forbes Finance Council who has been helping beneficiaries navigate their Medicare options.
Ashlee Zareczny
ReviewerAshlee Zareczny is a licensed Medicare agent dedicated to helping those eligible for Medicare find the best coverage options.