When Is Medicare Free, and How Much Do Most People Pay?
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About 99% of enrollees get Medicare Part A for free. For seniors, eligibility is based on you or a spouse having worked at least 10 years (40 quarters). Those who have a disability can get free Medicare Part A without meeting the work criteria.
However, the Medicare program is made of multiple parts, and when budgeting, it's important to consider the total costs for the different types of coverage. Although nearly everyone will get free Medicare Part A, the total cost for all components of Medicare will typically be between $165 and $370 per month. These costs are waived or reduced for those who qualify for low-income financial assistance programs.
How much does Medicare usually cost?
Most enrollees will get Medicare Part A for free. This will provide coverage for hospitalization, skilled nursing and hospice.
But the other parts of Medicare are not always free. This year, most people will pay $164.90 per month for Medicare Part B, which covers medical care such as doctor's appointments, lab tests and diagnostics. And there are other Medicare parts that can be added on top of this to cover prescription drugs, reduce your portion of medical costs or provide extra benefits. That's why your total Medicare costs will depend on the combination of Medicare plans you choose and the cost for each type of coverage.
The cheapest option is often to pay for Medicare Part B and enroll in a $0 Medicare Advantage bundle that includes prescription drug benefits and extras like dental coverage.
A costlier approach, which can provide a better limit for your medical expenses, is to pay for Part B, Medigap and Part D.
Type of Medicare coverage | What affects prices | Typical monthly cost |
|---|---|---|
| Part A (hospital care) | 99% of enrollees get coverage for free because of payroll taxes | Free |
| Part B (medical care) | Rate set annually by the government | $164.90 |
| Part C (Advantage bundle) | Costs vary based on the plan you choose | $28 |
| Part D (prescriptions) | $49 | |
| Medigap (supplement) | $155 |
When enrolling in Medicare, everyone will sign up for Medicare Parts A and B, the two components that are administered by the federal government. The monthly fee for Part B is determined each fall by the Centers for Medicare & Medicaid Services (CMS).
But keep in mind that private insurance companies sell Medicare Part C, Part D and Medigap plans, and the cost of these plans can vary by location and insurer. For example, a Medicare Advantage plan with prescription drug coverage costs an average of $28 per month, but in most places, available options start at $0 per month. Similarly, the cost for Medigap plans can vary widely, driven by factors such as whether an enrollee's age is used to set prices.
These variations in cost are why it's important to compare plan options when you initially sign up for Medicare and to review your choices annually. This will help you get the best deal based on your available plan options and current medical needs.
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What is premium-free Medicare Part A?
Premium-free Medicare is when you qualify for no-cost Medicare Part A because you or a family member paid Medicare taxes when you were working or you're eligible for a waiver.
The word "premium" is another way of saying monthly cost, so premium-free means cost-free.
Seniors enrolled in Medicare must meet the work requirement, but those who qualify for Medicare because of a disability are automatically eligible for free Part A.
Type of Medicare enrollee | Work requirement for free Medicare Part A |
|---|---|
| Seniors | You or a spouse having worked at least 10 years |
| Those who have a disability | No work requirement |
The small percentage of enrollees who do not meet the work criteria pay between $278 and $506 per month for Medicare Part A.
Who qualifies for free Medicare Part B?
Medicare Part B is only free if you have a low income and are enrolled in one of the Medicare Savings Programs for financial assistance.
Eligibility for these programs varies by state, and some states make it easier to qualify because of higher income limits or by eliminating the asset requirement.
You'll typically be eligible for the Medicare Savings Programs if you're an individual who earns less than $19,920 per year or a married couple who earns less than $26,868 per year. Some states automatically enroll eligible people in a Medicare Savings Program. We recommend checking with your state's Medicaid office to see if you're eligible for one of the three Medicare Savings Programs that pays for Medicare Part B.
Medicare Savings Program | Part B costs reduced | Typical income limit (indiv.) |
Typical asset limit (indiv.)
|
|---|---|---|---|
| Qualified Medicare Beneficiary (QMB) | $14,820 per year | $9,090 | |
| Specified Low-Income Medicare Beneficiary (SLMB) | $17,736 per year | $9,090 | |
| Qualifying Individual (QI) | $19,920 per year | $9,090 |
The QMB program can pay for the monthly plan costs as well as medical costs including the deductible, coinsurance and copayments. The SLMB and QI programs will only help pay the monthly cost of Part B.
You can also save by being dual enrolled in Medicare and Medicaid. In many states, you'll qualify for Medicaid if you earn less than $18,754, which will reduce or eliminate your health care costs like deductibles and coinsurance. Remember to also enroll in the Medicare Savings Program to reduce your monthly cost for Medicare Part B.
Can you get free Medicare Advantage (Part C)?
Yes, $0 Medicare Advantage plans with prescription drug coverage are available in 98% of the U.S. counties where plans are sold.
With these plans, you won't pay anything on top of the cost of Medicare Part B, making them a very good deal because they include coverage for hospitalization, medical care, medications and many add-on perks.
Access to these cheap Medicare Advantage plans is based on where you live, and there isn't any way to access free plans unless they're offered in your area.
A $0 Medicare Advantage plan doesn't necessarily mean it's poor quality or it has bad ratings. Instead, you can expect a more basic set of benefits such as a higher deductible or higher copays. With these cheap plans, you could pay more when you need medical care, but if you end up not needing to go to the doctor often, you could save money overall.
Is Medicare Part D free?
No, most people don't have access to free Medicare Part D plans.
However, $0 prescription drug coverage is available through the Extra Help program if you have a low income or by bundling your prescription benefits into a $0 Medicare Advantage plan, if one is available in your area.
Eligibility for Extra Help | Annual income limit | Resources limit (cash, stocks or bonds) |
|---|---|---|
| Individual | $22,110 | $16,660 |
| Married couple | $29,820 | $33,240 |
With the Extra Help program, those who have a low income can qualify for either full or partial benefits, and the program can reduce the cost of your plan and what you pay for medications. With full benefits, you'll pay no more than $4.15 for each generic prescription and $10.35 for each brand-name drug that's covered.
For those who don't qualify for Extra Help, there are affordable stand-alone Medicare Part D plans starting at $6 per month, even though the national average is much higher at $49 per month.
You may also be able to get free prescription drug benefits by choosing a Medicare Advantage bundle instead of a stand-alone Medicare Part D plan. However, this option is only possible if $0 plans are offered in your area, and choosing a bundle plan will also affect your health care benefits.
Can you get free Medicare Supplement (Medigap) plans?
No, Medigap plans will always have a cost, and sometimes the cost can be high, with enrollees paying an average of $155 per month.
Monthly Medigap rates are expensive because the plans can nearly eliminate many medical costs, in some cases.
That makes them a good deal for those with expensive medical needs. Because they work with original Medicare, they also usually give enrollees the flexibility to go to about 99% of the doctors in the country, rather than having a limited network of doctors and hospitals with a Medicare Advantage plan.
If you have a low income and qualify for Medicaid, you probably don't need a Medicare Supplement plan because your Medicaid benefits will act as supplemental coverage to Medicare, helping you reduce or eliminate your medical costs. There may be some exceptions.
For those who don't qualify for Medicaid, there are three ways to reduce the cost of a Medigap plan:
- Choose a lower-tier coverage option like Plan K, which can cost as low as $58 per month.
- Choose a high-deductible plan, which won't provide benefits during routine care but will help if you need an expensive treatment.
- Choose a select plan that will limit your supplemental benefits to in-network medical providers rather than cover any providers who accept Medicare.
If you have a high income, your costs for Medicare will be more.
You'll pay more for Part B and Part D in 2023 if your modified adjusted gross income on your 2021 tax return is above $97,000 as an individual or above $194,000 on a joint tax return.
Called the income-related monthly adjustment amount (IRMAA), these extra costs are based on your income taxes from two years ago.
Type of Medicare | Cost for high-income earners |
|---|---|
| Part B (medical care) | $238.80 to $560.50 per month |
| Part D (prescription drugs) | A surcharge of $12.20 to $76.40 per month on top of your plan cost |
Why do you have to pay for Medicare?
After paying into Medicare while you were working, you may be surprised to find out that Medicare isn't free after you retire.
The payroll taxes you paid when working only pay for 34% of the cost of the Medicare program. The monthly cost that enrollees pay for Medicare totals 15% of the program's budget.
This means that the benefits you get from the Medicare program are worth much more than what you pay each month.
How to save on Medicare costs
Even though you may not be able to get Medicare for free, there are some steps you can take to avoid paying more than you need to.
- Make sure you're getting all of the discounts you're eligible for
- Avoid late-enrollment penalties when enrolling in Medicare
- Look for Medicare Advantage plans with rewards programs for healthy activities
- See if there are local plans with the Medicare giveback program to reduce how much you pay for Part B
- Work with a financial advisor to limit the high-income Medicare surcharge
An estimated 30% to 45% of those who are eligible for low-income discount programs are not enrolled, showing how important it is to check your eligibility for each savings program.
Frequently asked questions
Is Medicare free for seniors age 65 and older?
No, most seniors pay between $165 and $370 per month for all components of their Medicare benefits. However, seniors who have a low income can qualify for free or reduced-cost Medicare.
Is Medicare free for the disabled?
Medicare is not always free for those who qualify through a disability. Enrollees who have a disability can get Medicare Part A for free without meeting the typical work requirement, and those who have a low income are also eligible for the discount programs to reduce or eliminate the cost of Medicare Part B and Part D.
Do you have to pay for Medicare?
Yes, most enrollees pay a monthly cost for Medicare benefits of at least $165. This is usually after paying payroll taxes to fund the Medicare program while working. However, these payments only account for about half of the cost to administer the Medicare program.
Who qualifies for free Medicare Part A?
About 99% of all Medicare enrollees get Medicare Part A for free because they have a work history of at least 10 years during which they paid Medicare taxes, or they have a disability that qualifies them for free Medicare Part A.
Can I get Medicare Part B for free?
Those who have a low income can qualify for free Medicare Part B benefits. Eligibility for the Medicare Savings Program varies by state, with a typical individual qualifying with an annual income of less than $19,920.
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