To start, let's take a look at situations where out-of-pocket costs can occur.
Original Medicare Part A costs
Generally, most people who’ve worked and paid taxes don’t pay a premium for Original Medicare Part A. Original Medicare Part A helps cover hospital stays and nursing care but not doctors' visits or long-term care.
There are some out-of-pocket costs you’ll have to pay on your own. For example, you generally won’t have to pay a premium for Original Medicare Part A if you paid payroll taxes when you were employed. However, there is a deductible you’ll have to meet before your Original Medicare Part A benefits kick in.
In 2021, the annual deductible is $1,484 per benefit period before the plan pays for hospitalizations. Generally, it covers about 80% of Medicare-approved inpatient costs for the first 60 days of a hospitalization. If your stay is longer than that, or if a service is above the Medicare-approved amount, you'll be responsible for paying extra.
Original Medicare Part B costs
This pays for a portion of doctors’ appointments, outpatient procedures, laboratory tests, ambulatory care, mental healthcare and some home health services. The Original Medicare Part B premium in 2021 is $148.50 a month (or higher, depending on your income)—plus an annual deductible of $203.
Medicare Part C costs
Also known as Medicare Advantage, these plans include Original Medicare Part A and Part B benefits. While Original Medicare generally does not cover dental and hearing, Medicare Advantage plans may include additional coverage for routine dental and hearing care, along with prescription drug coverage.
That doesn't mean out-of-pocket costs will not pop up. Fortunately, all Medicare Advantage plans offer an annual maximum out-of-pocket limit, after which you pay nothing for covered services.
Medicare Part D
If you don’t choose a Medicare Part C plan that includes prescription drug coverage, but still want prescription coverage, you may be able to enroll in a stand-alone Part D prescription drug plan. Most plans require a monthly premium, deductibles and copays.
Note that there is a , opens new window for signing up for Part D after the deadline. Be sure to check each plan’s drug list before you decide on a plan, to ensure that the medicines you take are included.