How Medicare Part A and Part B premiums work

Part A covers hospital stays, skilled nursing care, hospice, and some home health services. Most people pay nothing for Part A because they or their spouse paid Medicare taxes while working. If you did not work long enough to may have access to for premium-free Part A, you can buy it — the monthly cost varies based on how many quarters of work history you have.

Part B covers doctor visits, outpatient care, lab tests, and medical equipment. Nearly everyone who has Part B pays a monthly premium. The standard premium for 2024 is $164.90 per month, but your actual premium may be higher if your income is above a certain threshold. The income thresholds change each year.

Both premiums are usually taken directly from your Social Security check if you receive one. If you do not receive Social Security, Medicare sends you a bill.

Key Takeaways

  • Part A is free for most people who worked and paid Medicare taxes for at least 10 years; those who did not work long enough can buy it for roughly $275 to $505 per month depending on work history.
  • Part B has a standard monthly premium of $164.90 in 2024, but you pay more if your modified adjusted gross income from two years ago exceeds $97,000 (single) or $194,000 (married filing jointly).
  • Income-related premiums for Part B are based on your tax return from two years prior, so changes in your income take time to show up in your bill.
  • You can reduce your Part B premium through the Part B Income-Related Monthly Adjustment Amount (IRMAA) appeals process if your income dropped due to retirement, job loss, or divorce.

Part A premiums and who pays them

If you worked at least 40 quarters (10 years) and paid Medicare taxes, you do not pay a Part A premium. This covers roughly 99 percent of people on Medicare. Your spouse may also may have access to for premium-free Part A based on your work record.

If you did not work long enough, you can still buy Part A. The monthly premium depends on how many quarters of work you have. With 30 to 39 quarters, the premium is roughly $278 per month in 2024. With fewer than 30 quarters, it is roughly $505 per month. These amounts change each year.

You must also have Part B to buy Part A, with one exception: if you are still working and covered by your employer's health plan, you may be able to delay Part B without penalty while you buy Part A.

Part B premiums and income-based increases

Everyone on Part B pays at least the standard premium. In 2024, that is $164.90 per month. But if your income is above a certain level, you pay more — this is called an Income-Related Monthly Adjustment Amount (IRMAA).

Medicare looks at your modified adjusted gross income from your tax return two years before the current year. For 2024 premiums, Medicare used your 2022 tax return. If you were single and your income was above $97,000, or married filing jointly and above $194,000, you paid a higher premium. The more your income exceeds the threshold, the higher your premium climbs — it can reach $560.50 per month or more.

The income thresholds and premium amounts change each year. You can find the current year's thresholds on the Medicare website or by calling 1-800-MEDICARE.

When your income changes and how to report it

If your income drops — because you retired, lost a job, or went through a divorce — you may be able to lower your Part B premium right away instead of waiting for the next year's adjustment. This is done through an IRMAA appeal.

You must report the change within 60 days of the event that caused it. Acceptable life events include retirement, loss of income, loss of a spouse, divorce, or death of a spouse. You will need to provide proof, such as a letter from your employer stating your retirement date or a divorce decree.

Contact Social Security at 1-800-772-1213 to report the change and request a new premium calculation. If you receive Social Security, you can also report it through your Social Security account online.

Part A and B together: what your total monthly cost looks like

If you have premium-free Part A and the standard Part B premium, you pay $164.90 per month in 2024. If your income triggers an IRMAA increase, you might pay $200 to $560 or more per month for Part B alone.

Keep in mind that Part A and Part B premiums are only one piece of your Medicare costs. You also pay deductibles when you use services, copayments for certain visits, and coinsurance for hospital stays and skilled nursing care. Many people buy supplemental coverage (Medigap) or choose Medicare Advantage to manage these out-of-pocket costs.

How to pay your premiums

If you receive Social Security, your Part A and Part B premiums are deducted automatically from your monthly benefit. You do not have to do anything — the payment happens on its own.

If you do not receive Social Security, Medicare sends you a bill each month. You can pay by mail, phone, or online through the Medicare website. You can also set up automatic payments from your bank account.

If you miss a payment, contact Medicare right away. Unpaid premiums can affect your coverage, and you may owe a late enrollment penalty if you drop Part B and try to rejoin later.

Frequently Asked Questions

Do I have to pay Part A and Part B premiums if I have Medicare Advantage?

You still pay the Part B premium if you are enrolled in Medicare Advantage. Part A remains free if you may have access to for it. Medicare Advantage plans may have their own premiums on top of Part B, though many have zero additional premium.

What happens if I delay signing up for Part B?

If you do not sign up for Part B when you first become may be able to access and you are not covered by an employer plan, you pay a late enrollment penalty. The penalty is 10 percent of the standard premium for each year you were late, and it is added to your premium permanently.

Can my Part B premium go down if my income drops?

Yes, through an IRMAA appeal. You must report the income change within 60 days of a may have access to event like retirement or job loss, and provide proof. Social Security will recalculate your premium based on your current income.

Why does Medicare use my tax return from two years ago?

Medicare uses a prior year's income because tax returns take time to process and file. This two-year lag means your premium reflects your actual income history, not an estimate. If your current income is much lower, you can appeal to have it adjusted sooner.

Is there a maximum Part B premium I could pay?

The Part B premium increases with income, but there is a cap based on the highest income tier. In 2024, the highest IRMAA bracket results in a premium of roughly $560.50 per month, but this amount changes yearly based on program costs.