Medicare Part A and Part B costs depend on your work history and income

Most people age 65 and older pay nothing for Medicare Part A (hospital insurance) because they or their spouse paid Medicare taxes while working. Medicare Part B (medical insurance) has a monthly premium that most people pay, though the amount varies based on your income. In 2024, the standard Part B premium is $174.70 per month, but you may pay more or less depending on your specific situation.

Part A also has costs beyond the premium. When you go to the hospital, you pay a deductible for each benefit period, which is $1,676 in 2024. Part B has its own deductible of $240 per year. After you meet these deductibles, you typically pay a percentage of the cost for services, not the full amount.

Key Takeaways

  • Part A (hospital insurance) is free for most people who worked and paid Medicare taxes, but you pay a deductible when admitted to the hospital.
  • Part B (medical insurance) costs $174.70 per month in 2024 for most people, though higher earners pay more through Income-Related Monthly Adjustment Amounts (IRMAA).
  • Your Part B premium is deducted automatically from your Social Security check unless you arrange to pay another way.
  • If you delay signing up for Part B when you first become may be able to access, you may pay a permanent penalty of 10 percent more per year for each year you waited.

Part A costs: hospital stays and skilled nursing

Part A covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health services. You do not pay a monthly premium for Part A if you or your spouse paid Medicare taxes for at least 10 years (40 quarters). If you did not work long enough, you can buy Part A coverage, but the monthly premium ranges from $278 to $556 depending on your work history.

When you use Part A services, you pay a deductible for each benefit period. A benefit period starts when you enter the hospital and ends 60 days after you leave without receiving inpatient care. In 2024, the Part A deductible is $1,676 per benefit period. If you stay longer than 60 days in the hospital, you pay coinsurance (a daily amount) for days 61 through 90, and an even higher daily amount for days 91 and beyond.

Skilled nursing facility care is covered only after a hospital stay of at least three days. You pay nothing for the first 20 days, then $209.50 per day for days 21 through 100 in 2024. After day 100, you pay all costs yourself.

Part B costs: doctor visits and outpatient care

Part B covers doctor visits, outpatient services, medical equipment, and preventive care. The standard monthly premium in 2024 is $174.70, deducted from your Social Security payment. This premium increases each year, usually by a small amount tied to inflation.

After you pay the annual Part B deductible of $240, Medicare pays 80 percent of the approved amount for most services, and you pay 20 percent. This means your out-of-pocket costs depend on how much care you use. For example, if your doctor charges $200 for an office visit and Medicare approves $150, you pay $30 (20 percent of $150) after you have met your deductible.

Some preventive services, such as annual wellness visits, mammograms, and colonoscopies, are covered at no cost to you after you meet the Part B deductible. However, if the doctor finds something during a preventive visit and performs additional work, you may owe a copay for that extra service.

Income affects your Part B and Part D premiums

If your income is above a certain level, you pay more for Part B through an Income-Related Monthly Adjustment Amount (IRMAA). Medicare uses your tax return from two years ago to calculate this. In 2024, if you are single and your modified adjusted gross income exceeds $97,000, your Part B premium increases. For married couples filing jointly, the threshold is $194,000.

The higher your income above the threshold, the more you pay. Someone with a single income of $200,000 might pay $522.70 per month for Part B instead of the standard $174.70. These amounts change each year based on income brackets set by Medicare.

IRMAA also applies to Part D (prescription drug coverage) and Part A if you buy it. If you experience a major life event such as retirement, divorce, or death of a spouse, you can contact Social Security to report the change and potentially lower your IRMAA for the current year.

What happens if you delay Part B enrollment

You become may be able to access for Medicare at age 65. If you have employer health insurance through your job or your spouse's job, you can delay Part B without penalty. However, if you do not have coverage and do not sign up for Part B when you first become may be able to access, you pay a permanent penalty.

The penalty is 10 percent of the standard Part B premium for each full year you could have had Part B but did not sign up. If you delay for three years, you pay 30 percent more than the standard premium for the rest of your life. This penalty does not go away, even if you later sign up.

The initial enrollment period for Part B is the three months before the month you turn 65, the month you turn 65, and the three months after. If you miss this window and do not have may have access to coverage, you can sign up during the General Enrollment Period (January 1 through March 31 each year), but the penalty applies.

How to pay your Part B premium

If you receive Social Security, your Part B premium is deducted automatically from your monthly benefit. Most people do not see a bill because the payment happens behind the scenes. If you do not receive Social Security, Medicare sends you a bill each month or quarter, depending on how you set it up.

You can change how you pay by contacting Medicare at 1-800-MEDICARE or visiting Medicare.gov. Some people choose to pay quarterly instead of monthly, or to pay by check instead of automatic deduction. If you have questions about your specific bill, the notice you receive will have a phone number to call.

Costs you should plan for beyond Part A and B premiums

Part A and Part B do not cover everything. You are responsible for costs that Medicare does not cover, such as dental care, vision care, hearing aids, and long-term care in a nursing home. Many people buy Medigap (supplemental insurance) or enroll in a Medicare Advantage plan to cover some of these gaps, and those have their own premiums and out-of-pocket costs.

If you take prescription medications, Part D (prescription drug coverage) is separate from Part A and B. Part D has its own monthly premium, annual deductible, and copays. You can enroll in Part D when you first become may be able to access for Medicare, and missing the important date can result in a permanent penalty similar to Part B.

Frequently Asked Questions

Do I have to pay for Part A if I never worked?

If you did not work long enough to earn Part A coverage, you can buy it. The monthly premium ranges from $278 to $556 depending on how many quarters of Medicare taxes you or your spouse paid. You can enroll in Part A during your initial enrollment period or during the General Enrollment Period.

Will my Part B premium go up every year?

Yes, the standard Part B premium increases most years. The amount of the increase is tied to inflation and announced in the fall for the following year. If your income changes, your IRMAA may also change, which affects your total premium.

What if I cannot afford my Part B premium?

If your income is low, you may be able to get help paying your premiums through Medicaid or the Medicare Savings Program. These programs vary by state. You can contact your state Medicaid office or call 1-800-MEDICARE to learn whether you may be able to get help.

Can I change my mind about Part B after I sign up?

Yes, you can drop Part B, but you will need to contact Social Security or Medicare to do so. If you drop Part B and later want to sign up again, you may owe the permanent penalty unless you have a may have access to reason for the gap in coverage.

Are there any services Part A and B cover at no cost?

Yes. Part A covers preventive services such as screenings and vaccines at no cost. Part B also covers certain preventive services, like annual wellness visits and cancer screenings, at no cost after you meet the deductible. Your doctor's office can tell you which services are covered.