Most people approach Medicare believing two things that turn out not to be true.
First, they believe Medicare is “free” because they paid into it while working.
Second, they believe that choosing a Medicare plan is primarily about benefits.
Both assumptions are costly.
Over the years, I’ve helped thousands of people understand their Medicare coverage and the expenses that come with it. From those conversations, one pattern shows up again and again: people don’t struggle because Medicare lacks benefits — they struggle because they misunderstand how Medicare costs actually work.
Medicare is not a single insurance policy. It is a set of rules that determines:
- which costs are fixed,
- which costs are variable,
- which costs are predictable,
- and which costs can grow quickly under the wrong circumstances.
Most financial surprises in Medicare don’t come from rare events. They come from structural misunderstandings — monthly premiums people didn’t expect, cost sharing they didn’t budget for, penalties that never go away, or exposure they didn’t realize existed until it was too late.
This guide is designed to explain those cost structures clearly.
Rather than starting with plans or enrollment steps, it starts with the question people actually care about:
How much does Medicare really cost — and why?
To answer that, Medicare costs need to be separated into categories. Monthly premiums work differently than doctor visit costs. Hospital stays behave differently than prescriptions. Some costs are capped. Others are not. Some costs are avoidable with planning. Others are not.
When these cost categories are mixed together, people make decisions based on incomplete information. When they are explained separately, Medicare becomes far easier to understand — and far less intimidating.
This guide focuses on the most common ways Medicare becomes expensive:
- recurring monthly costs,
- shared costs when you receive care,
- penalties and surcharges,
- cost differences between coverage structures,
- and worst-case exposure when health needs change.
It does not attempt to rank plans or recommend specific coverage. Instead, it explains where the costs come from, how they behave over time, and how small misunderstandings can lead to large financial consequences.
Once you understand the cost structure, coverage decisions become clearer. Without that understanding, even the “right” plan can turn out to be the wrong financial choice.
Think of this guide as a starting point — a way to orient yourself before comparing options or making commitments. Medicare rewards people who understand its cost rules. It punishes those who don’t.
The chapters that follow each focus on a specific Medicare cost reality — not to alarm you, but to make sure there are no surprises later.