Most people think Medicare costs are simple. The Part B premium is $202.90 a month and that is it. The reality is more complex. Many seniors find unexpected bills in their first year on Medicare. Here are 10 costs most people do not see coming.
1. The Part B deductible
Before Medicare pays for any outpatient care, you have to meet the Part B deductible. For 2026, that is around $257 per year.
That means the first $257 of doctor visits, lab tests, and outpatient procedures each year come out of your pocket. It resets every January 1. Many people forget this and get surprise bills in January and February.
2. The 20 percent Part B coinsurance with no cap
After you meet the Part B deductible, Original Medicare pays 80 percent of the approved amount for most outpatient services. You pay the other 20 percent. There is no annual maximum on what you can owe in coinsurance under Original Medicare.
For most people, 20 percent is manageable. But if you have a bad year with surgery, expensive imaging, or chemotherapy, 20 percent can add up to tens of thousands of dollars. This is why most Original Medicare members buy a Medigap plan to cap that exposure.
3. The Part A hospital deductible
If you are admitted to the hospital as an inpatient, you owe the Part A deductible. For 2026, that is around $1,676 per benefit period.
The kicker is that the Part A deductible is per benefit period, not per year. A benefit period starts the day you are admitted and ends 60 days after you leave. If you are admitted again more than 60 days later, you owe another full deductible.
4. IRMAA surcharges for higher incomes
If your income is above certain thresholds, you pay an Income-Related Monthly Adjustment Amount on top of your Part B and Part D premiums. IRMAA can add hundreds of dollars per month to your Medicare bill.
Medicare looks at your tax return from 2 years ago. So your 2026 IRMAA is based on your 2024 income. This often hits people in the first year of retirement, when last working year's income was high. You can appeal using Form SSA-44. See our IRMAA guide.
5. Late enrollment penalties
If you skip Part B or Part D when you are first eligible and do not have other creditable coverage, you face permanent penalties.
The Part B penalty is 10 percent of the premium for every 12 months you delayed. The Part D penalty is 1 percent of the national base premium for every full month you went without coverage. Both penalties last for as long as you have Medicare. Read more in our missed enrollment guide.
6. The Part D deductible
Most Part D drug plans have a yearly deductible before the plan starts paying. For 2026, plans can charge up to $590 in deductible.
Some plans waive the deductible for cheaper generic drugs. Others apply it to every drug. If you take an expensive specialty drug, you might pay the full retail price in January and February until you meet your deductible.
7. Non-preferred pharmacy costs
Most Part D and Medicare Advantage drug plans have preferred pharmacies. You get the lowest copays at those pharmacies. If you fill at a non-preferred pharmacy, your copays go up.
The difference can be significant. The same prescription at a preferred pharmacy might cost $10. At a non-preferred pharmacy it could cost $30. Over a year on regular medications, that adds up.
8. Out-of-network specialist visits on Medicare Advantage
Medicare Advantage plans use networks. If you see a specialist outside the network, your costs go way up. Some HMO plans do not cover out-of-network care at all except for emergencies.
People assume their Medicare Advantage plan will cover any doctor that takes Medicare. It usually does not. The plan only covers doctors in its specific network.
9. Skilled nursing facility coinsurance after day 20
If you need to go to a skilled nursing facility after a hospital stay, Medicare covers the first 20 days at no cost to you. But days 21 through 100 require a daily coinsurance.
For 2026, the daily skilled nursing coinsurance is around $209.50 per day. That is over $6,000 a month if you need extended skilled nursing care. After day 100, Medicare pays nothing.
10. Dental, vision, and hearing care
Original Medicare does not cover routine dental cleanings, eye exams for glasses, or hearing aids. These are common expenses for seniors that come out of pocket entirely under Original Medicare.
Many Medicare Advantage plans include some dental, vision, and hearing coverage, but with caps. A typical Medicare Advantage plan might cover $500 of dental work and $200 toward eyewear per year. For more, see our dental, vision, hearing guide.
Bonus: ambulance rides and emergency room visits
Ambulance rides are covered under Part B, but you owe the 20 percent coinsurance. A single ambulance trip can be $400 to $800 out of pocket.
Emergency room visits cover you in true emergencies, but you owe a copay (typically $90 to $120 on Medicare Advantage) and may owe coinsurance on related services.
How to plan for hidden Medicare costs
Three things every senior should do:
- Build a Medicare budget that includes premium, deductibles, expected copays, and a buffer of $1,000 to $2,000 a year for surprises.
- If you are going to be on Original Medicare, buy a Medigap plan to cap your exposure on Part B coinsurance and the Part A deductible.
- If you go with Medicare Advantage, pick a plan with a lower maximum out-of-pocket limit. The lowest premium plan is often not the lowest total cost.
The most expensive Medicare year is usually the first one. Things settle down after you understand how the program works and have the right plan in place.
