Most people pay Part B through Social Security, and Part A is usually free

If you are already getting Social Security, your Part B premium comes out of your monthly check automatically. You do not have to do anything — it happens on its own. Part A, which covers hospital care, costs nothing for most people who worked long enough to earn it.

The amount you pay for Part B depends on your income from two years ago. If your income was higher in the past, you may pay more than someone else your age. If your income drops — because you retire or have a major life change — you can ask Medicare to recalculate what you owe.

If you are not yet on Social Security, or if you want to pay a different way, you have other options. Medicare will bill you directly, or you can set up automatic payments from your bank account.

Key Takeaways

  • Part B premiums are deducted from your Social Security payment each month if you receive Social Security benefits.
  • Part A is free for most people who worked and paid Medicare taxes for at least 10 years (40 quarters).
  • Your Part B premium amount is based on your income from two years before you enrolled, and you can request a recalculation if your income drops.
  • If you do not receive Social Security, Medicare sends you a bill each month, or you can arrange automatic bank account payments.
  • You can change how you pay Part B once per year during the annual enrollment period.

Part A: Hospital Insurance — usually no cost

Part A covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health services. Most people do not pay a monthly premium for Part A because they or their spouse worked and paid Medicare taxes for at least 10 years.

If you did not work long enough to earn free Part A, you can still buy it. The monthly premium varies depending on how many quarters of work credit you have. In 2024, the premium ranges from about $278 to $505 per month, but this amount changes each year. You would pay this along with your Part B premium.

You do pay a deductible when you use Part A — that is a set amount you pay out of pocket before Part A coverage kicks in. The deductible for hospital stays is separate from the deductible for skilled nursing or home health services.

Part B: Medical Insurance — premium based on your income

Part B covers doctor visits, outpatient care, medical equipment, and preventive services. Everyone who enrolls in Part B pays a monthly premium. The standard premium in 2024 is $164.90 per month, but your actual premium may be higher or lower depending on your income.

Medicare looks at your Modified Adjusted Gross Income (MAGI) from two years before you enrolled. If your income was above a certain threshold, you pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of the standard premium. This means higher-income people pay more. The income thresholds and adjustment amounts change each year.

If your income drops because you retire, lose a job, or have another major life event, you can ask Medicare to recalculate your premium. You will need to file a form called the Life-Changing Event form and provide proof of the change — such as a recent tax return, a letter from your employer, or a divorce decree. Medicare will review your request and may lower your premium retroactively.

How to pay if you receive Social Security

When you enroll in Medicare Part B, Social Security automatically deducts your premium from your monthly benefit. This happens without you having to take any action. Your Social Security statement will show the amount deducted each month.

If you receive Supplemental Security Income (SSI) in addition to regular Social Security, your Part B premium still comes out of your regular Social Security payment, not your SSI.

If you want to change how you pay — for example, to pay by bank transfer instead — you can contact Social Security or Medicare to make that change. You can update your payment method once per year during the annual enrollment period, which runs from October 15 to December 7.

How to pay if you do not receive Social Security

If you are not receiving Social Security benefits, Medicare sends you a bill each month. You can pay by check, money order, or automatic bank withdrawal. When you first enroll in Medicare, you will receive instructions on how to set up your payment method.

To set up automatic payments from your bank account, contact Medicare at 1-800-MEDICARE (1-800-633-4227) or visit Medicare.gov. You will need to provide your bank account number and routing number. Automatic payments are deducted on the same day each month.

If you miss a payment, Medicare will send you a reminder. If you do not pay within three months, your Part B coverage can be terminated. You can restart it during the next general enrollment period, but you may face a permanent penalty added to your premium.

Income-Related Monthly Adjustment Amount (IRMAA) — what it means for your costs

If your income is above a certain level, you pay more for Part B and Part D (prescription drug coverage). This extra amount is called IRMAA. In 2024, if you are single and your MAGI is over $97,000, you will pay an adjustment. If you are married filing jointly, the threshold is $194,000. These thresholds increase slightly each year.

The adjustment is tiered — the higher your income, the more you pay. Someone with a MAGI of $150,000 pays more than someone with a MAGI of $110,000. Medicare calculates this based on your tax return from two years prior, so there is often a lag between when your income changes and when your premium adjusts.

If you had a major income drop — such as retirement, job loss, or death of a spouse — you do not have to wait two years for the adjustment. File the Life-Changing Event form with Medicare to request a recalculation. You will need to provide documentation of the change and your current income estimate.

Changing your payment method or premium amount

You can change how you pay your Part B premium once per year during the annual enrollment period. If you want to switch from Social Security deduction to automatic bank withdrawal, or vice versa, contact Medicare or Social Security during this window.

If your income has dropped significantly, you can request a premium recalculation at any time by filing a Life-Changing Event form. This is not limited to the annual enrollment period. Common may have access to events include retirement, loss of income, death of a spouse, divorce, or loss of employer coverage.

You can also contact Medicare to discuss your payment options if you are having trouble paying your premiums. Medicare has programs that may help low-income beneficiaries pay Part B premiums, though these vary by state. Your local Area Agency on Aging or a Medicare counselor can tell you what programs exist in your area.

Frequently Asked Questions

What if I cannot afford my Part B premium?

Some states have programs that help pay Part B premiums for people with limited income. Contact your local Area Agency on Aging or call 1-800-MEDICARE to learn what programs may be available in your state. You can also ask about payment plans if you have fallen behind on bills.

Do I have to pay Part B if I am still working?

If you are still working and have employer health insurance, you can delay enrolling in Part B without penalty as long as you are covered by your employer's plan. Once you leave your job or lose that coverage, you have a limited time to enroll in Part B without paying a permanent penalty. Talk to your employer's benefits office about your options.

What happens if I do not pay my Part B premium?

If you miss payments for three months or more, Medicare can terminate your Part B coverage. You can restart it during the next general enrollment period (January 1 to March 31), but you will likely pay a permanent 10% penalty on top of your regular premium for as long as you have Part B.

Can I pay my Medicare premiums in a lump sum instead of monthly?

No, Medicare requires monthly payments. However, if you receive Social Security, the deduction happens automatically each month. If you do not receive Social Security, you can set up automatic bank withdrawals so the payment is taken on the same day each month without you having to remember.

How do I know if my IRMAA will change next year?

Medicare uses your tax return from two years ago to calculate IRMAA. If your income was higher two years ago, you will pay an adjustment this year. If your income drops this year, the adjustment will not change until two years from now — unless you file a Life-Changing Event form to request an when ready recalculation based on your current situation.