Key Takeaways

• Many Medicare enrollees overlook critical cost-sharing details in their plan documents, only to discover unexpected expenses later.

• Understanding the fine print on your Medicare coverage can help you plan for real, ongoing costs like coinsurance, deductibles, and service exclusions.

Medicare Isn’t Free Just Because You Paid Into It

You may assume that paying Medicare taxes throughout your working life means you shouldn’t have to worry about costs in retirement. Unfortunately, that’s not the case. Even after you enroll, Medicare includes ongoing monthly premiums, annual deductibles, and unpredictable out-of-pocket costs depending on the services you use.

It’s easy to miss this if you rely solely on general summaries or marketing material. But those details are spelled out clearly in your plan documents—just not always where you expect them.

The Summary of Benefits Doesn’t Tell You Everything

When you first compare plans, the Summary of Benefits can seem like a helpful shortcut. It lists what’s covered and gives a few cost estimates. But it rarely shows:

• Which providers are in-network and what you pay out-of-network

• How much prescription drugs cost under specific tiers

• Whether prior authorization is required for certain services

• What happens when you hit your plan’s out-of-pocket maximum

• Which services are capped or have quantity limits

The real answers often live in the Evidence of Coverage (EOC), which is a document typically 100+ pages long. That’s where you find the fine print that makes a major difference in how much you actually pay.

Medicare Part A Has Limits You Might Not Expect

Medicare Part A covers inpatient hospital stays, but even that comes with restrictions. As of 2025:

• The inpatient deductible is $1,676 per benefit period.

• After 60 days in the hospital, daily coinsurance kicks in at $419 per day.

• After 90 days, you tap into lifetime reserve days—which are limited to 60 total across your life—with a coinsurance of $838 per day.

If you stay past those limits, Medicare pays nothing. You’ll be responsible for the full cost unless you have other coverage to help.

Medicare Part B Can Lead to Ongoing Out-of-Pocket Costs

You pay a monthly premium for Part B (standard amount is $185 in 2025), but that’s not the only cost involved. You also face:

• An annual deductible of $257

• A 20% coinsurance on most services after that

• No limit on annual out-of-pocket spending for Part B alone

Even a routine visit can surprise you if the provider charges more than Medicare allows or uses out-of-network labs.

Prescription Drug Costs Are Still a Challenge

Medicare Part D offers prescription drug coverage, but the costs can be unpredictable. In 2025, the out-of-pocket maximum is now capped at $2,000 annually. While that’s a relief, there are still other costs to watch:

• Annual deductible (up to $590)

• Copayments or coinsurance based on drug tiers

• Formulary restrictions that may leave your prescription uncovered

• Prior authorizations, step therapy, and quantity limits that delay access

You need to review your plan’s formulary every year to see what’s changing, even if you stay in the same plan.

Out-of-Pocket Maximums Aren’t Universal

Original Medicare doesn’t have an out-of-pocket cap. That means you could face unlimited medical expenses if you require long-term or extensive care. Some private Medicare plans offer caps, but they vary widely.

In 2025, Medicare Advantage plans have an in-network maximum out-of-pocket limit of $9,350, and $14,000 for combined in- and out-of-network care. That may seem like a safety net, but not all care counts toward it, and you may not realize that until the bills arrive.

Services You Might Assume Are Covered But Aren’t

Many enrollees are surprised to find that Medicare doesn’t automatically cover:

• Routine dental exams, cleanings, and procedures

• Hearing aids and hearing exams

• Vision exams and eyeglasses

• Long-term custodial care (help with daily living activities)

Even preventive services must meet specific criteria. For example, Medicare covers one wellness visit each year, but not a full physical exam. If your provider performs additional services during that visit, you may get charged.

Prior Authorization Rules Can Delay or Deny Care

If you’re enrolled in a Medicare Advantage plan, you may need prior authorization for:

• MRIs or CT scans

• Skilled nursing facility admissions

• Outpatient surgeries

• Home health services

This means your doctor must get approval before you receive care, or the plan might refuse to pay. These rules are often detailed in the plan’s Evidence of Coverage, and failure to read them can leave you paying out-of-pocket.

The Real Cost of Going Out-of-Network

If you see a doctor or specialist outside your plan’s network, you could face much higher costs. Some plans offer partial reimbursement, but many do not.

Also, just because a provider accepts Medicare doesn’t mean they participate in your plan’s network. Always verify in-network status before scheduling any service. These details are rarely highlighted upfront and often buried deep in provider directories.

Changes Can Happen Every Year

Each fall, you receive an Annual Notice of Change (ANOC) that outlines adjustments to your plan for the upcoming year. These might include:

• New or increased copayments

• Changes to drug formularies

• Revised prior authorization requirements

• Increased out-of-pocket maximums

Failing to review this document means you might stick with a plan that no longer meets your needs or budget.

Timing Matters: Enrollment Penalties Are Permanent

You can face late enrollment penalties if you delay signing up for Medicare Part B or Part D when you’re first eligible and don’t have creditable coverage.

• The Part B penalty adds 10% for each full 12-month period you were eligible but didn’t enroll.

• The Part D penalty adds 1% of the national base premium for every month you went without coverage.

These penalties apply for life. They are often not obvious until your first bill arrives and you see a higher-than-expected premium.

Telehealth and Mental Health Coverage: Expanding but Still Limited

Medicare has expanded coverage of telehealth services, and as of 2025, this includes permanent access to mental health therapy from home. However, starting October 1, 2025, you’ll need to have an in-person mental health visit every 12 months to maintain telehealth access.

Also, access to therapists may be limited, especially in rural areas, even if they’re technically covered.

Coordination with Other Coverage Is Not Automatic

If you have retiree coverage, Medicaid, or a group health plan, coordination with Medicare matters. But it doesn’t happen on its own. Miscommunication between insurers can lead to denials or unexpected costs if Medicare pays second when it should pay first.

You need to ensure all parties have the correct coordination of benefits (COB) setup. This often requires paperwork and calls—something that isn’t explained in basic plan brochures.

Reviewing the Details Now Can Save You Thousands Later

Reading the fine print may feel overwhelming, but skipping it can cost you more over time. A careful review of your Medicare plan documents—especially your Evidence of Coverage and Annual Notice of Change—can reveal where to expect expenses.

Understanding what’s included, what’s excluded, and where to watch for hidden fees is key to avoiding unwelcome surprises. Don’t rely on assumptions or advertising highlights. Focus on the contract language that controls what you’ll actually pay.

How to Take Control of Medicare Planning

Here are practical steps you can take right now:

• Download your Evidence of Coverage (EOC) from your plan’s member portal.

• Review your Annual Notice of Change (ANOC) every fall to spot differences for the upcoming year.

• Use the Medicare Plan Finder tool to check drug costs and coverage rules.

• Confirm your providers are in-network before any appointment.

• Track your out-of-pocket spending so you know when you’re nearing plan caps.

• Contact a licensed agent listed on this website to walk through complex plan terms and evaluate options that fit your healthcare needs and financial goals.

A Closer Look Can Help You Avoid the Shock Later

The reality of Medicare costs becomes clear only when you experience them firsthand. But that shock is often preventable if you pay attention to the fine print from the start. Take time to understand your plan’s limitations, conditions, and real cost structure.

When you’re better informed, you can make smarter choices that protect your health and your finances. If you need help interpreting your plan’s documents or comparing options, get in touch with a licensed agent listed on this website today.