Medicare is a vital resource for millions of Americans age 65 and older, as well as younger individuals with qualifying disabilities. But while Medicare is designed to make healthcare more accessible and affordable, understanding how it works, particularly when it comes to costs can be overwhelming.
At Legacy From The Heart, we believe in simplifying the complex. As an independent insurance agency, we work for you, not any one insurance company. Our goal is to help you feel confident and informed when choosing the Medicare coverage that fits your needs and budget. One of the most common areas of confusion we see? The difference between deductibles, premiums, and coinsurance. In this post, we’re going to break it all down so you can understand how these three terms impact your healthcare expenses.
What Are Medicare Premiums?
Let’s start with premiums, because this is typically the first cost you’ll encounter when enrolling in Medicare.
A premium is the amount you pay each month to have Medicare coverage, similar to a subscription fee. Depending on which parts of Medicare you enroll in, you may pay multiple premiums.
Premiums by Medicare Part:
- Medicare Part A (Hospital Insurance)
Most people do not pay a premium for Part A. If you or your spouse worked and paid Medicare taxes for at least 10 years, Part A is typically premium-free. However, if you don’t meet that requirement, you may have to pay a monthly premium—up to $505 per month in 2025. - Medicare Part B (Medical Insurance)
Part B has a standard monthly premium, which is $174.70 in 2025 for most people. However, if your income is above a certain threshold, you may pay more due to Income-Related Monthly Adjustment Amounts (IRMAA). - Medicare Part C (Medicare Advantage)
Medicare Advantage plans are offered by private insurance companies. Some plans have a $0 premium, while others charge a monthly amount in addition to your Part B premium. These costs vary by plan and location. - Medicare Part D (Prescription Drug Coverage)
Like Part C, Part D premiums vary based on the plan you choose. You’ll also pay more if you’re subject to an IRMAA surcharge.
What Are Medicare Deductibles?
A deductible is the amount you must pay out-of-pocket before Medicare begins to cover services. You’ll encounter different deductibles depending on the parts of Medicare you’re enrolled in.
Deductibles by Medicare Part:
- Part A Deductible (Inpatient Hospital Care)
The Part A deductible in 2025 is $1,632 per benefit period. A benefit period starts when you’re admitted to a hospital and ends after 60 days without inpatient care. This means you could potentially pay the deductible more than once in a year if you’re hospitalized multiple times. - Part B Deductible (Outpatient Services)
For 2025, the annual Part B deductible is $240. Once you’ve paid this amount for covered services, Medicare generally pays 80%, and you’re responsible for the remaining 20% (which we’ll cover in the next section on coinsurance). - Part C and Part D Deductibles
These deductibles vary by plan. Some Medicare Advantage or drug plans have $0 deductibles, while others may have higher deductibles, especially for certain drug tiers.
What Is Medicare Coinsurance?
Coinsurance is the percentage of the cost you’re responsible for after you’ve met your deductible. It’s a form of cost-sharing between you and Medicare.
Examples of Medicare Coinsurance:
- Part A Coinsurance
After the initial 60 days of a hospital stay, you pay:- $408 per day for days 61–90
- $816 per day for days 91–150 (using your lifetime reserve days)
- All costs beyond 150 days
For skilled nursing facility care, you pay:
-
- $0 for the first 20 days
- $204 per day for days 21–100
- All costs beyond day 100
- Part B Coinsurance
Once you meet the Part B deductible, you generally pay 20% of the Medicare-approved amount for services such as:- Doctor visits
- Outpatient therapy
- Durable medical equipment (like wheelchairs or walkers)
- Part C and D Coinsurance
With Medicare Advantage (Part C), coinsurance amounts vary by plan. Some offer flat copayments instead. Part D (drug coverage) also varies, but coinsurance applies especially during the “coverage gap” or “donut hole” stage.
Why Do These Costs Matter?
Understanding how premiums, deductibles, and coinsurance work together helps you plan your healthcare budget and avoid unexpected expenses.
For example:
- If you only look at a $0 premium Medicare Advantage plan without realizing it has a high deductible and high coinsurance, you might be surprised by the actual costs when you need care.
- If you see a high monthly premium for a Medigap plan (Medicare Supplement), it may seem expensive until you realize it covers most deductibles and coinsurance, potentially saving you more in the long run.
At Legacy From The Heart, we help you compare options based on total cost of care, not just the monthly premium. We can help you decide whether Original Medicare + a Medigap plan, or a Medicare Advantage plan, is the right fit based on your personal health, income, and lifestyle.
Tips for Managing Medicare Costs
Here are a few ways you can manage or reduce your Medicare-related expenses:
- Apply for Extra Help or a Medicare Savings Program
These programs assist with Part D costs and/or Part B premiums if your income qualifies. - Shop Around During Open Enrollment
Each fall, you can compare plans and switch if needed. We can help you evaluate plan changes and find better value. - Consider a Medicare Supplement Plan (Medigap)
If you want predictable out-of-pocket costs, a Medigap plan might be worth the higher premium. - Use In-Network Providers
For Medicare Advantage plans, staying in-network can reduce coinsurance and copay costs. - Ask About Generic Medications
Generic drugs usually have lower coinsurance and copays on Part D plans.
Let Legacy From The Heart Be Your Medicare Guide
Navigating Medicare doesn’t have to be stressful. Whether you’re turning 65 soon or already enrolled and wondering if your current plan still meets your needs, Legacy From The Heart is here to help.
As an independent agency in Tulsa, Oklahoma, we aren’t tied to any one insurer, which means our advice is 100% focused on what’s best for you. We’ll walk you through the details, explain your options in plain language, and help you select a Medicare plan that fits both your health and your wallet.
Final Thoughts
Medicare premiums, deductibles, and coinsurance can add up, but with the right guidance, you can make informed decisions that protect your health and your finances. Understanding how these costs work together is the first step toward peace of mind in retirement.
At Legacy From The Heart, we’re honored to be your trusted Medicare resource. If you have questions or want a free, no-pressure consultation, reach out today. We’re here to serve, guide, and advocate for you, every step of the way.
Contact Legacy From The Heart in Tulsa, Oklahoma, today at (918) 500-3167 to schedule your personalized Medicare review. Your peace of mind is just one conversation away.