"Free government healthcare." If that's what you were told Medicare would be, we need to have a frank conversation. Medicare is not free. It has premiums, deductibles, coinsurance, and gaps that can cost you thousands if you're not prepared. The good news: once you know the numbers, you can plan for them — and in many cases, reduce them significantly.
The Three Cost Buckets
Every Medicare cost falls into one of three categories:
- Premiums — monthly payments to stay enrolled
- Deductibles — what you pay before coverage begins
- Cost-sharing — copays and coinsurance when you use care
Each part of Medicare has its own version of these costs.
Part A Hospital Costs
Most people pay $0/month for Part A. The cost that catches people off guard is the Part A deductible — $1,736 in 2026. It resets every benefit period, not annually. Two separate hospital stays more than 60 days apart? Two deductibles.
| Part A Cost Type | 2026 Amount |
|---|---|
| Monthly Premium | $0 for most people |
| Inpatient Deductible | $1,736 per benefit period |
| Hospital Days 1–60 | $0 coinsurance |
| Hospital Days 61–90 | $434/day |
| Skilled Nursing Days 21–100 | $217.50/day |
Part B Medical Costs
The standard monthly premium is $202.90 in 2026 — up from $185 in 2025. If your income was above $109,000 (individual) on your 2024 tax return, you pay more through IRMAA surcharges. After the $283 annual deductible, you pay 20% with no cap.
| Part B Cost Type | 2026 Amount |
|---|---|
| Monthly Premium | $202.90 (standard) |
| Annual Deductible | $283 |
| Your Share After Deductible | 20% — no annual maximum |
Part D Drug Coverage Costs
Average 2026 premium: ~$64.96/month. Maximum deductible: $615. New in 2026: a $2,100 annual out-of-pocket cap — once you hit it, drugs are free for the rest of the year. This is a major improvement for anyone on expensive medications.
Medicare Advantage Costs
California average MA premium: ~$11/month in 2026 (national average $14/month). Many plans are $0. You still pay the Part B premium regardless. Advantage plans have annual out-of-pocket maximums — $9,250 in-network, $13,900 combined — a protection Original Medicare doesn't offer.
| Medicare Advantage Cost | 2026 Averages |
|---|---|
| Average Monthly Premium (CA) | $11/mo ($14 national) |
| Part B Premium (still owed) | $202.90/mo |
| In-Network OOP Maximum | $9,250/year |
| Combined OOP Cap | $13,900/year |
IRMAA — When Higher Income Means Higher Premiums
IRMAA stands for Income-Related Monthly Adjustment Amount. If your 2024 Modified Adjusted Gross Income was above $109,000 (individual) or $218,000 (married filing jointly), you pay more for Part B and Part D in 2026. Medicare looks back two years — so 2024 income determines 2026 costs. If you recently retired and your income dropped, you may be able to appeal using Form SSA-44.
| Individual Income (2024 MAGI) | Part B Premium | Part D Surcharge |
|---|---|---|
| $109,000 or less | $202.90 | $0 |
| $109,001 – $137,000 | $284.10 | $14.50 |
| $137,001 – $171,000 | $405.80 | $37.50 |
| $171,001 – $205,000 | $527.50 | $60.40 |
| $205,001 – $499,999 | $649.20 | $83.30 |
| $500,000+ | $689.90 | $91.00 |
Meet Robert From Pasadena
Robert, 68 — Pasadena, CA
Robert just retired. His 2024 income — the last year he worked — was high, landing him in the $405.80 IRMAA bracket for 2026.
A specialist helped him file Form SSA-44 documenting his retirement income reduction. His premium adjusted back to $202.90. He saved over $2,400 for the year with one phone call.
Late Enrollment Penalties: The Cost of Waiting
- Part B: 10% added to your premium for every 12-month period you were eligible but didn't enroll. Two years late = 20% permanently added to every monthly bill.
- Part D: 1% of the national base premium ($38.99) for every month without creditable coverage. Permanent.
There's no expiration on a Medicare penalty
Not sure what you'll actually pay?
Use our free Medicare Cost Calculator, or book a call for a personalized 2026 estimate from a licensed specialist.
Book a free callHow2Medicare is a free service of J Johnston Insurance, helping California's Medicare beneficiaries understand their costs and find coverage that fits their budget.