Yes, most people pay a monthly premium for Medicare Part B, but the amount depends on your income

Medicare Part B is not free. You pay a monthly premium, and the amount you owe is based on your income from two years ago. In 2024, the standard premium is $164.90 per month for most people, but if you earned more income, you may pay between $230 and $560 per month. The premium is usually taken directly from your Social Security check.

There are a small number of exceptions. If you have very low income and limited resources, you may may have access to for help paying your Part B premium through your state's Medicaid program. But for the vast majority of people on Medicare, Part B costs money every month for as long as you stay enrolled.

Key Takeaways

  • Medicare Part B has a monthly premium that comes out of your Social Security payment, and the standard amount in 2024 is $164.90, though higher earners pay more.
  • Your premium is based on your income from two years before you start paying, so if you had a high-income year, you will see that reflected in your Part B cost.
  • If your income drops significantly — through retirement, job loss, or divorce — you can request a reduction in your premium by contacting Social Security.
  • Some people with very low income and few resources may receive help paying Part B through Medicaid, which varies by state.
  • Part B covers doctor visits, outpatient care, and some preventive services, so the premium is the cost of that coverage.

How the monthly premium is calculated

Your Part B premium is based on your Modified Adjusted Gross Income (MAGI) from two years before you pay. If you are paying in 2024, Medicare looked at your 2022 income. This is why your premium might seem high if you had a good income year before you retired.

The income brackets change each year. In 2024, if you filed taxes as a single person and your MAGI was $97,000 or less, you pay the standard premium. If your MAGI was between $97,001 and $123,000, you pay more. The highest earners — those with MAGI over $500,000 — pay the most. Married couples filing jointly have higher income thresholds before the premium increases.

Medicare sends you a notice each year showing your premium amount and the income they used to calculate it. If you think the income figure is wrong, you can contact Social Security to correct it.

What happens if your income drops after you start paying

If you retire, lose a job, or go through a major life change that lowers your income, you do not have to wait two years for your premium to adjust. You can request an Income-Related Monthly Adjustment Amount (IRMAA) reduction by contacting Social Security.

You will need to show proof of the income change — a letter from your employer, divorce papers, or a tax return showing lower income. Social Security will review your request and may lower your premium right away. This is one of the few times Medicare adjusts your payment before the standard annual change.

When you might not pay the full premium

If you have very low income and limited savings, your state's Medicaid program may pay part or all of your Part B premium. This is called a may have access to Medicare Beneficiary (QMB) program. Each state runs its own version, so the income limits and rules are different depending on where you live.

To learn about you may have access to, contact your state Medicaid office or call 1-800-MEDICARE. They can tell you the income limit in your state and what documents you need to provide. Some people may have access to for QMB without realizing it, so it is worth asking if you are on a tight budget.

Why Part B costs money and what it covers

Part B is optional coverage — you do not have to take it when you turn 65. But if you do not sign up when you are first may be able to access, you may pay a penalty for the rest of your life. The monthly premium is the cost of having this coverage available to you.

Part B pays for doctor visits, outpatient hospital care, lab tests, X-rays, and some preventive services like cancer screenings and vaccines. It also covers medical equipment like wheelchairs and oxygen. You still pay a deductible and coinsurance for most services, but Part B is what makes those services affordable in the first place.

How the premium is deducted from your benefits

If you are receiving Social Security, Medicare automatically takes your Part B premium from your monthly check. You will see the deduction listed on your Social Security statement. If you are not yet receiving Social Security, you will get a bill from Medicare each month.

If you want to change how you pay — for example, to pay by check instead of automatic deduction — you can contact Social Security or Medicare to make that request. You can also set up a different payment method through your Medicare account online at Medicare.gov.

What to do if your premium seems too high

If you think your premium is wrong, start by checking the notice Medicare sent you. It will show the income they used and the premium amount. If the income is incorrect, contact Social Security with proof of the correct amount — usually a recent tax return or a letter from your employer.

If your income dropped recently due to retirement, job loss, or divorce, request an IRMAA reduction as soon as possible. The sooner you report the change, the sooner your premium can be lowered. You can also ask Social Security whether you might may have access to for help through Medicaid.

Frequently Asked Questions

Can I turn down Medicare Part B to avoid paying the premium?

Yes, Part B is optional. But if you do not sign up when you first turn 65, you will owe a penalty of 10 percent of the standard premium for each year you delayed, and that penalty stays with you for life. The only exception is if you are still working and covered by your employer's health plan.

What if I cannot afford the Part B premium?

Contact your state Medicaid office to see if you may have access to for a QMB program that pays your premium. You can also request an IRMAA reduction if your income has dropped recently. Call 1-800-MEDICARE to find out what help is available in your state.

Does the premium change every year?

Yes. Medicare announces the new standard premium each October, and it takes effect the following January. Your personal premium may also change if your income changes or if you have a life event like retirement or divorce.

Why is my Part B premium higher than my neighbor's?

Your premium is based on your income from two years ago. If you had higher income than your neighbor during that period, you will pay more. Once your income drops, it takes two years for your premium to adjust to the lower amount.

Can I get a refund if I overpaid my Part B premium?

If you paid too much because of an income error or a life change you reported late, Social Security will usually credit the overpayment to your future premiums rather than sending a check. Ask them about your options when you contact them to correct the problem.