You’ve seen the ads. A smiling person on TV holding up a big sign: “$0 premium!” Is that what Medicare costs?

It sounds amazing. Free healthcare!

But then you talk to your neighbor. She has Medicare. She tells you she paid $8,000 last year for medical costs.

Wait, what? How can Medicare cost $8,000 if the premium is $0?

Here’s the truth: Medicare costs are confusing on purpose. Insurance companies know that if they just advertise the premium, it sounds cheap. But the premium is only one piece of what you’ll actually pay.

We spoke with Medicare Expert, Dalia Cabrera, who has 20 years of Medicare experience. She helped us break down what Medicare really costs so you can figure out which type of plan is right for you and what you’ll actually spend in 2026.

First, Let’s Understand the Medicare Alphabet Soup

Before we talk about costs, you need to understand what Medicare actually is. Because Medicare isn’t one thing; it’s a federal program with several different parts that work together (or separately).

Think of Medicare like a cafeteria. You can choose different items to put on your tray. Some items you have to take. Others are optional. And there are two completely different ways to go through the line.

The Parts of Medicare

Part A (Hospital Insurance) This covers hospital stays, skilled nursing facilities, hospice, and some home health care. Most people get Part A for free if they (or their spouse) worked and paid Medicare taxes for at least 10 years. Even though the premium is usually free, you still pay deductibles and coinsurance when you use it.

Part B (Medical Insurance) This covers doctor visits, outpatient care, medical equipment, and preventive services. This is NOT free. In 2026, most people will pay $206.50 per month. You also pay deductibles and 20% of the cost for most services (with no limit on how much you might pay).

Part C (Medicare Advantage) This is the “all-in-one” alternative. Instead of having separate Part A and Part B (and usually Part D), you get everything bundled through a private insurance company. These are the plans advertising “$0 premiums.” But you still pay the Part B premium to the government, plus copays when you use services.

Part D (Prescription Drug Coverage) This covers medications. If you have Original Medicare (Parts A and B), you need to buy a separate Part D plan. If you have Medicare Advantage, drug coverage is usually included. Part D plans have their own monthly premiums, deductibles, and copays.

Two Different Paths: Original Medicare vs. Medicare Advantage

Here’s where it gets really confusing. You have two completely different ways to get your Medicare coverage:

Path 1: Original Medicare

• Premium: Part A is usually free and Part B will be $202.90/month in 2026, but if you earn higher income it could be higher than that.
• Additional Fees
  • For Part A covered services, you pay a copay depending on the facility type and amount of days after the benefit period deductible is met (which may be more than once in a year)
  • For Part B covered services, Medicare pays 80% for covered outpatient services, and you pay 20% (with no yearly limit) after the annual deductible is met
• You would need to buy a separate Part D plan if you want prescription drug coverage
• Many people also buy a Medigap plan to help pay their share of the costs for Part A or B services
• You can go to any doctor or hospital that accepts Medicare (most do)

Path 2: Medicare Advantage (Part C)

• You still need Part A and Part B (and pay that $202.90 to the government)
• But then a private company (like Humana or UnitedHealth) takes over your coverage
• You can only go to doctors in their network (except emergencies, urgencies, out-of-area dialysis and plan-approved services performed by out-of-network providers)
• You may have copays for services (like $25 for a doctor visit)
• Drug coverage is usually included
• There IS a yearly limit on what you pay (but it can be high, like $8,000)

What About Medigap?

If you choose Original Medicare, you might also want Medigap (also called Medicare Supplement Insurance). This is extra insurance that covers what Original Medicare doesn’t.

Medigap plans have letter names (like Plan G or Plan N). They cost extra, often $150 to $300+ per month. But they can save you thousands if you get sick.

Important: You can’t have both Medigap and Medicare Advantage. It’s one or the other.

Quick Summary: What Most People Have

Most people have one of these three setups:

1. Original Medicare + Part D + Medigap
   
   • Most flexible (any Medicare-contracted doctor)
   • Most expensive monthly premiums
   • Most predictable costs if you get sick
     
2. Original Medicare + Part D (no Medigap)
   
   • Flexible (any Medicare-contracted doctor)
   • Lower monthly costs
   • Could pay a lot if you get sick (that 20% has no limit)
     
3. Medicare Advantage
   
   • Lower monthly premiums (sometimes $0 beyond Part B)
   • Must use network doctors
   • Protected by out-of-pocket maximum
   • Often includes extras like dental
     

Now that you understand what Medicare actually is, let’s talk about what it really costs.

The Four Types of Medicare Costs

Think of Medicare costs like a restaurant bill. You don’t just pay for your entrée. You also pay tax, tip, and maybe an appetizer. Medicare works the same way.

There are four different types of costs:

1. Premiums (Your Monthly Bill)

This is what you pay every month just to have coverage. You pay this whether you go to the doctor or not. It’s like a membership fee.

For 2026:

• Part B premium: $202.90 per month for most people (this went up 11.6% from last year)
• Part D premium: Varies by plan, but averages around $35 to $45 per month
• Medicare Advantage premium: Can be $0, but might be $20, $50, or more depending on the plan
• Medigap premium: Varies widely, often $150 to $300+ per month depending on your age and location
  
  

2. Deductibles (What You Pay Before Coverage Kicks In)

The deductible is how much you have to pay first, before your insurance starts helping. You pay this amount once per year.

For 2026:

• Part A deductible: For 2026, this went up to $1,736
• Part B deductible: Around $283 per year
• Part D deductible: Up to $615 per year (some plans have $0 deductible)
  
  

3. Coinsurance (Your Share After the Deductible)

After you pay your deductible, both Part A and Part B services require you to pay coinsurance for some services.

Part A CoInsurance Costs

For Part A, with Original Medicare you pay 5% for the temporary (respite) care of a hospice patient so that the caregiver can rest or take some time off.

Part B Coinsurance Costs

For Part B, most coinsurance is 20% of the bill.

With Original Medicare:

• You pay 20% of every doctor visit
• You pay 20% of every medical test
• You pay 20% of medical equipment
• There is NO LIMIT to how much you might pay

That last part is important. Let’s say you need surgery that costs $50,000. Medicare pays 80%. You pay 20%. That’s $10,000 out of your pocket.

4. Copays (Fixed Amounts for Certain Services)

Part A Copays Costs

Part A copays vary widely based on the facility and services you get. For example, once you meet your deductible for a hospital stay, it costs $0/day. But when you hit the 61st day it costs $419/day until day 91 when it goes up again.Skilled nursing facilities are similar. Day 1-20 are free. On day 21, you pay $209.50/day. Review the Medicare Costs schedule for detailed information.

Some plans charge a flat amount for certain things. For example, $15 for a doctor visit or $40 for a specialist visit. These are copays.

Medicare Advantage plans often use copays instead of coinsurance.

Here’s What Most People Don’t Realize About Medicare Costs

Original Medicare has NO yearly limit on what you can spend.

Read that again. No limit.

If you get very sick, you could spend $20,000, $30,000, or more in a single year on that 20% coinsurance. This is why many people buy Medigap (supplemental insurance) to cover that 20%.

Medicare Advantage plans DO have a limit on what you spend each year. But that limit can be high: often $6,000 to $8,000 or more.

What You’ll Actually Pay: Real Comparisons of Medicare Costs

Let’s compare what the same person would pay with Original Medicare versus Medicare Advantage in 2026.

Robert: Managing Multiple Health Conditions

Robert is 72 with diabetes, heart disease, and arthritis. He sees his primary doctor monthly, three specialists quarterly, takes eight medications, and needs regular lab work. He had one hospital stay last year.

Option 1: Original Medicare (without Medigap)

Monthly costs:

• Part B premium: $202.90
• Part D premium: $45
• Total per month: $247.90

Yearly costs:

• Monthly premiums: $247.90 × 12 = $2,974.80
• Part B deductible: $283
• Doctor visits (20% of $200 each × 12): $480
• Specialist visits (20% of $300 each × 12): $720
• Lab tests (20% of $2,000 total): $400
• Part D medications: $2,100 (hits the cap)
• Hospital stay (Part A deductible): $1,736
• Hospital doctor fees (20% of $5,000): $1,000
• Total per year: $9,693.80

And remember: If Robert needs surgery or extensive treatment, there’s no limit to what he might pay.

Option 2: Medicare Advantage Plan

Monthly costs:

• Part B premium: $202.90
• Medicare Advantage premium: $25
• (Part D included)
• Total per month: $227.90

Yearly costs:

• Monthly premiums: $227.90 × 12 = $2,734.80
• Primary doctor copays: $15 × 12 = $180
• Specialist copays: $40 × 12 = $480
• Lab test copays: $20 × 6 = $120
• Medication copays: $1,800
• Hospital copay: $350 per day × 3 days = $1,050
• Total per year: $6,364.80

But here’s the key: This plan has a $6,700 out-of-pocket maximum. So even if Robert gets much sicker, that’s the most he’ll pay for covered services.

The verdict for Robert: Medicare Advantage saves him over $3,000 in a typical year AND protects him from unlimited costs if things get worse. The tradeoff? He must use network doctors.

Susan: Generally Healthy

Susan is 68 and in good health. She sees her doctor twice a year for checkups, takes two generic medications for blood pressure, and rarely needs other care.

Option 1: Original Medicare (without Medigap)

Monthly costs:

• Part B premium: $202.90
• Part D premium: $35
• Total per month: $237.90

Yearly costs:

• Monthly premiums: $237.90 × 12 = $2,854.80
• Part B deductible: $283
• Doctor visits (20% of $200 each × 2): $80
• Medication copays: $120
• Total per year: $3,337.80

But Susan worries: What if she breaks a hip or gets cancer? She could face tens of thousands in bills.

Option 2: Medicare Advantage Plan

Monthly costs:

• Part B premium: $202.90
• Medicare Advantage premium: $0
• (Part D included)
• Total per month: $202.90

Yearly costs:

• Monthly premiums: $202.90 × 12 = $2,434.80
• Doctor visit copays: $20 × 2 = $40
• Medication copays: $120
• Total per year: $2,594.80

This plan has a $5,500 out-of-pocket maximum, protecting Susan if she gets sick.

The verdict for Susan: Medicare Advantage saves her about $700 per year when healthy AND protects her with a spending cap. The downside? She must stay in network and might need referrals for specialists.

The Medigap Alternative

Both Robert and Susan could also consider Original Medicare WITH a Medigap plan. This would cost an extra $150 to $250 per month but would cover most or all of their share of the cost for Part A and Part B covered services. For Robert, this could actually save money. For Susan, it’s expensive peace of mind.

2026 Medicare Costs Are More Expensive Than 2025

Here’s what’s changing for 2026:

Costs going UP:

• Part B premium: Up 11.6% to $202.90 per month
• Many Part D premiums: Some are doubling in cost
• Part B & Part D deductibles
• Some Medicare Advantage plans: Adding premiums or raising copays

Costs going DOWN:

• Part D out-of-pocket maximum: Now capped at $2,100 per year (this is great news if you take expensive medications)

The Truth About “$0 Premium” Plans

Let’s talk about those “$0 premium” Medicare Advantage plans.

They’re not lying. The plan’s premium really is $0.

But you still pay:

• The Part B premium, $202.90, to the federal government. Most people have it taken out of their social security check
• Copays every time you see a doctor
• Copays for medications
• Possibly higher costs if you go out of network
• Up to the plan’s out-of-pocket maximum if you get sick

A “$0 premium” plan is not the same as “$0 cost.”

As Dalia Cabrera, Umbra Medicare Patient Advocate, explains, “One common reason people should review new plans is if the renewal includes an increase on deductibles, copayments, or coinsurance on medical services or prescription drugs when compared to what they had.”

How to Calculate What YOU Will Really Pay

Here’s how to figure out your actual costs for any plan:

Step 1: Add up all monthly premiums (Part B + Part D or Medicare Advantage + Medigap if you have it)

Step 2: Multiply by 12 to get your yearly premium cost

Step 3: Add your deductibles for the year

Step 4: Estimate your medical costs:

• How many doctor visits do you usually have?
• Do you see specialists?
• What do you pay per visit or per service?
• What do your medications cost with this plan?

Step 5: Add it all up

Step 6: Ask yourself: “What if I get sick? What’s the maximum I could pay?”

• With Original Medicare without Medigap, the answer is: there’s no maximum.
• With Medicare Advantage, look at the plan’s out-of-pocket maximum.
• With Original Medicare plus Medigap, you’re usually pretty well protected.

The Hidden Medicare Costs People Forget

Don’t forget these costs that Medicare doesn’t cover:

• Dental care (cleanings, fillings, dentures)
• Routine vision care (eye exams, glasses)
• Hearing aids
• Long-term care (assisted living, nursing homes)

Some Medicare Advantage plans include some of these benefits. Original Medicare does not.

Why This Matters for Your Decision

Understanding costs helps you make a better choice.

Don’t just look at the premium. Look at the total picture.

A plan with a higher premium might actually cost you less overall if you use healthcare a lot. A plan with a $0 premium might end up costing you more if you have high copays and deductibles.

“The pros to enroll in a Medicare Advantage plan are that they offer additional benefits when compared to Original Medicare, at a low or no monthly premium, and the cost-sharings are lower,” says Dalia. “However, there are operational differences between private insurers, which influences the experience beneficiaries have with each one.”

This Is a Lot to Figure Out

Yes, it is. We know.

You’re trying to:

• Calculate premiums
• Add up deductibles
• Estimate copays and coinsurance
• Figure out medication costs
• Predict what might happen if you get sick
• Compare dozens of plans

It’s overwhelming. And you don’t have to do it alone.

Get Expert Help with the Math

Umbra Health Advocacy has patient advocates with deep Medicare expertise who can help you calculate your real costs and choose the right plan.

An advocate can:

• Walk you through all four types of costs
• Help you calculate what you’d pay with different plans
• Show you how to use the Medicare Plan Finder tool
• Compare total yearly costs (not just premiums)
• Explain what you’d pay if you got sick
• Help you understand the fine print

If you already have Original Medicare, this support may be covered by your insurance. Contact us at 857-766-8236 or tell us about your situation to see if you qualify.

Don’t make a decision based on a TV commercial. Make a decision based on real numbers for your real life.