Medicare Might Cover a Lot—But Here’s What You’ll Still End Up Paying For

Key Takeaways

• Even with Medicare, you are responsible for a variety of out-of-pocket costs, including premiums, deductibles, coinsurance, and services that aren’t covered at all.

• Planning ahead for these gaps is essential to avoid surprise bills and to choose the right supplemental coverage, if needed.

Medicare Covers a Lot, But Not Everything

Medicare is a vital resource, but it doesn’t cover all your healthcare expenses. Many assume that once they enroll, their medical costs will be minimal or even nonexistent. Unfortunately, that’s not the case. There are several areas where Medicare either shares costs with you or doesn’t provide any coverage at all.

Understanding these limitations is key to avoiding unexpected financial burdens, especially as healthcare needs increase with age. Here’s a closer look at what you may still pay for in 2025.

1. Premiums You Still Have to Pay

Even though Medicare is a government program, it is not entirely free. Most parts of Medicare require monthly premium payments.

Part A

• Usually premium-free if you or your spouse paid Medicare taxes for at least 10 years (40 quarters).

• If you didn’t meet this requirement, the monthly premium in 2025 is $518 if you paid taxes for fewer than 30 quarters, and $284 for 30 to 39 quarters.

Part B

• Most people pay a standard premium of $185 per month in 2025.

• Higher-income individuals pay more due to the Income-Related Monthly Adjustment Amount (IRMAA).

Part D

• Prescription drug coverage under Part D also requires a monthly premium.

• The average premium in 2025 is $46.50, but the exact amount depends on your chosen plan.

2. Annual Deductibles and When They Apply

Before Medicare begins paying for most services, you must meet an annual deductible.

• Part A: You pay a deductible of $1,676 for each benefit period in 2025. This applies to hospital stays.

• Part B: You pay a $257 annual deductible. After that, Medicare typically covers 80% of outpatient services.

• Part D: Plans can have a deductible of up to $590 in 2025.

These costs are your responsibility, even if you only use services occasionally.

3. Coinsurance and Copayments Add Up Quickly

Once deductibles are met, you still share the cost of your care with Medicare.

• Part A Hospital Stays:

  • Days 1–60: $0 coinsurance after deductible.

  • Days 61–90: $419 per day.

  • Days 91 and beyond: $838 per day for lifetime reserve days.

• Skilled Nursing Facility:

  • First 20 days: $0.

  • Days 21–100: $209.50 per day.

• Part B Services:

  • You pay 20% of the Medicare-approved amount for most services like doctor visits, physical therapy, and outpatient procedures.

These amounts can be substantial, especially if you require frequent or extended care.

4. Prescription Drug Costs Aren’t Fully Covered

While Part D plans provide prescription coverage, you are still responsible for part of the costs:

• You may pay a deductible up to $590.

• After meeting the deductible, you share costs through copays or coinsurance.

• Once your total out-of-pocket reaches $2,000, catastrophic coverage kicks in for the rest of the year.

Even with this cap in place in 2025, high drug prices can cause significant financial strain throughout the year until that limit is reached.

5. No Coverage for Dental, Vision, or Hearing

Original Medicare does not cover:

• Routine dental care, dentures, or cleanings.

• Routine vision exams or eyeglasses.

• Hearing exams or hearing aids.

If you need these services, you’ll have to pay out of pocket or find separate insurance.

Some Medicare Advantage plans offer extra benefits, but they vary widely in what they include and are subject to limitations.

6. Long-Term Custodial Care Isn’t Included

One of the most expensive health-related needs for older adults is long-term care. Medicare does not cover custodial care, which includes help with activities of daily living such as:

• Bathing

• Dressing

• Eating

• Toileting

Medicare will cover short-term stays in skilled nursing facilities only if certain conditions are met, but not extended stays or assisted living arrangements.

This is a critical gap in coverage that can lead to overwhelming expenses unless you have long-term care insurance or other financial resources.

7. Emergency Coverage Outside the U.S. Is Limited

If you travel outside the country, Original Medicare offers little to no coverage for emergency or routine care abroad.

Some Medigap plans may offer limited coverage for emergencies during international travel, but this is not included in Medicare itself.

If you plan to spend time overseas, you may need to buy travel medical insurance to avoid paying full cost for care.

8. Excess Charges From Non-Participating Providers

Doctors who don’t accept Medicare assignment can bill up to 15% more than the Medicare-approved amount. You are responsible for paying that difference.

• This is called the Part B excess charge.

• It is legal and applies if you receive care from a non-participating provider.

While many providers accept Medicare assignment, it’s not universal. Check with your doctors ahead of time to avoid surprises.

9. Late Enrollment Penalties Can Be Permanent

If you don’t enroll in Medicare on time, you may face late penalties that last for the rest of your life.

• Part B: If you delay enrollment without other creditable coverage, your monthly premium increases by 10% for each full 12-month period you could have had Part B.

• Part D: A penalty also applies if you go without creditable prescription coverage for 63 consecutive days or more.

These penalties are added to your premiums permanently, so it’s essential to understand enrollment timelines and act on time.

10. Income-Related Premium Adjustments

In 2025, if your modified adjusted gross income (MAGI) from your 2023 tax return exceeds $106,000 (individual) or $212,000 (joint), you’ll pay more for Part B and Part D premiums.

This additional cost, known as IRMAA, can add hundreds of dollars per month depending on your income bracket. It’s a hidden cost many retirees don’t anticipate.

Why It’s Important to Plan for These Costs

Even though Medicare covers many essential services, the total out-of-pocket exposure can be significant. You’ll need to account for:

• Monthly premiums

• Annual deductibles

• Routine copays and coinsurance

• Non-covered services like dental and long-term care

• Potential excess charges and international travel gaps

These costs can easily add up to several thousand dollars per year, even if you’re relatively healthy.

What You Can Do:

• Create a healthcare budget: Account for known premiums, average copays, and occasional unexpected bills.

• Evaluate supplemental options: Consider whether a Medicare Supplement (Medigap) or Advantage plan makes sense for your situation.

• Understand timelines: Enroll during your Initial Enrollment Period to avoid penalties.

• Work with a licensed agent: A professional can help match your budget and health needs to the most suitable plan structure.

Be Prepared for the Costs Medicare Doesn’t Cover

While Medicare is a reliable foundation, it is not a complete solution for all healthcare expenses. The out-of-pocket costs can add up, especially for those needing frequent services or long-term care. That’s why understanding what Medicare doesn’t cover is just as important as knowing what it does.

Take the time to explore your options, review your health needs, and plan financially. To get personalized help, speak with a licensed agent listed on this website who can walk you through your choices and help avoid costly mistakes.