One in Four Americans Assume Medicare Is Free, but Part B Costs $202.90 Monthly
A new Allianz Life survey reveals a widespread misconception that ignores the $2,434.80 annual premium and additional out-of-pocket costs for most retirees.
By Naomi Tesfaye ·
One in four Americans believes Medicare covers their medical expenses without cost, according to a survey by Allianz Life released in October 2026. This perception ignores the reality that most enrollees pay a monthly premium for the program.
The standard monthly premium for Medicare Part B in 2026 is $202.90. This amount totals $2,434.80 over a twelve-month period for the average beneficiary. Individuals with higher incomes may pay more than this standard rate.
Part B covers physician visits, outpatient services, and certain home health services. Beyond the monthly premium, beneficiaries must pay an annual deductible of $283. After meeting that deductible, enrollees are responsible for 20% of the Medicare-approved cost for covered services.
The survey found that 43% of participants incorrectly believe that prescription drugs are automatically included in standard Medicare. In reality, Original Medicare consists only of Part A and Part B. To receive coverage for prescription medications, individuals must separately enroll in a Part D plan. In 2026, the annual out-of-pocket limit for covered Part D drugs is $2,100.
Long-term care presents another area of confusion. Thirty-four percent of Americans think that everyday assistance in a residential setting is covered by Medicare. It generally is not. Medicare may pay for specific skilled nursing or rehabilitation services following a qualifying hospitalization, but it does not cover the cost of long-term custodial care.
Kelly LaVigne, vice president of Consumer Insights at Allianz Life, told Yahoo Finance that the misunderstanding about long-term care is particularly concerning. She noted that Americans clearly understand that medical costs can threaten their financial security during retirement. The survey showed that 61% of respondents fear they will not be able to afford the care they need in that stage of life.
While about 99% of beneficiaries receive Part A without a monthly premium, that coverage has its own costs. The hospital deductible for Part A in 2026 is $1,736 per benefit period. If a hospital stay extends beyond 60 days, daily charges begin. Days 61 through 90 cost $434 per day, and days 91 through 150 cost $868 per day for lifetime reserve days used.
