Costs Associated with Medicare Medicare generally covers only about two-thirds of the cost of health- care services for beneficiaries age 65 and older. Out-of-pocket spending accounts for 12% and may include premiums, deductibles, copays, and coinsurance. Costs vary depending on the coverage you choose and the medical services you use. Medicare Premiums Part A is generally premium-free if you or your spouse paid Medicare payroll taxes for at least 10 years. If not, you may pay up to a $499 monthly premium in 2022. Part B premiums are based on modified adjusted gross income (AGI), as reported on your IRS tax return two years before the year for which Medicare premiums are paid. (See facing table.) Part C (Medicare Advantage) premiums vary by plan. Part D premiums also vary by plan, but higher-income individuals must pay an extra charge in addition to the plan’s regular premium. Medigap If you are enrolled in Original Medicare Parts A and B, you have the option of purchasing Medicare Supplement Insurance, or Medigap, which is sold by Medicare-approved private insurers. Medigap policies are designed to help cover the deductibles and copayments that the original program doesn’t cover, but it will not pay for procedures that aren’t covered by Medicare. If you are enrolled in a Medicare Advantage plan, you don’t need (and cannot enroll in) Medigap.