Medicare premiums vary by plan type and income, and most people pay monthly

Medicare premiums are what you pay each month to keep your coverage active. The amount depends on which part of Medicare you have — Part A (hospital), Part B (doctor visits), Part D (drugs), or a Medicare Advantage plan — and whether you have other income or resources. Most people who worked 10 years or more in jobs that paid Medicare taxes pay nothing for Part A. Part B, Part D, and Advantage plans all have monthly premiums that change each year.

The federal government sets standard premium amounts each January. However, what you actually pay can be higher or lower based on your income, when you first signed up, and whether you may have access to for help paying premiums. Some people pay the standard amount. Others pay a surcharge called an Income-Related Monthly Adjustment Amount (IRMAA) if their income is above a certain threshold. Still others receive subsidies that lower their cost.

Key Takeaways

  • Part A (hospital insurance) is free for most people who paid Medicare taxes for at least 10 years; those who did not pay may owe a monthly premium.
  • Part B (doctor and outpatient care) has a standard monthly premium set by Medicare each year, plus potential income-based surcharges for higher earners.
  • Part D (prescription drug coverage) premiums vary by plan and insurance company, ranging from zero to over $100 per month depending on the plan you choose.
  • Medicare Advantage plans replace Original Medicare and have their own premiums, which are often lower than Part B plus Part D but may have higher out-of-pocket costs.
  • Your income from the previous two years determines whether you pay extra; if your income drops, you can request a reduction in your surcharge.

Part A premiums: Hospital insurance costs

Part A covers hospital stays, skilled nursing facility care, hospice, and some home health services. If you or your spouse paid Medicare taxes for at least 10 years while working, you pay nothing for Part A. This is true whether you are 65 or older, disabled, or have end-stage renal disease.

If you did not work long enough to earn free Part A, you can still enroll and pay a monthly premium. The amount depends on how many quarters of Medicare-taxed work you have. Someone with 30 to 39 quarters pays less than someone with fewer than 30 quarters. These premiums are set each year and are higher than Part B premiums for people in this situation.

You do not pay a separate deductible for Part A coverage itself, but you do pay a deductible when you use hospital services — for example, when you are admitted to the hospital, you pay a one-time deductible that covers your first 60 days of that hospital stay.

Part B premiums: Doctor and outpatient care

Part B covers doctor visits, outpatient care, medical equipment, and preventive services. Almost everyone who enrolls in Medicare pays a monthly Part B premium. The standard premium amount is set each January by the Centers for Medicare & Medicaid Services (CMS) and applies to most new enrollees.

If your modified adjusted gross income (MAGI) from two years ago exceeds a certain threshold, you pay an additional surcharge on top of the standard premium. This surcharge is called an Income-Related Monthly Adjustment Amount. For 2024, the income thresholds begin at $97,000 for single filers and $194,000 for married couples filing jointly, but these amounts change yearly. The surcharge can add $70 to $350 or more per month to your Part B premium, depending on your income level.

If your income drops — because you retire, lose a job, or have a major life event — you can request that Medicare recalculate your surcharge based on your current income rather than the two-year-old figure. This is called a life-changing event appeal, and you must submit it within 60 days of the event.

Part D premiums: Prescription drug coverage

Part D is optional coverage for prescription drugs. If you do not enroll when you first become may be able to access and later sign up, you may owe a late enrollment penalty for as long as you have Part D coverage. The penalty is roughly 1 percent of the national average Part D premium per month of delay.

Part D premiums vary widely because many insurance companies offer different drug plans. A plan with a $0 premium exists in most areas, but it may cover fewer drugs or require higher out-of-pocket costs when you fill prescriptions. Plans with higher premiums often cover more drugs and have lower copays. You choose your plan each year during the annual enrollment period (October 15 to December 7), and premiums can change from year to year even if you stay with the same plan.

Like Part B, Part D premiums are also subject to income-based surcharges if your income is above the threshold. The surcharge is added to whatever premium your chosen plan charges.

Medicare Advantage plan premiums

Medicare Advantage (Part C) is an alternative to Original Medicare (Parts A and B). These plans are offered by private insurance companies and must cover everything Original Medicare covers, plus usually add prescription drug coverage and extra benefits like dental or vision.

Many Medicare Advantage plans have a $0 monthly premium, meaning you pay nothing beyond your Part B premium to the government. However, some plans do charge a monthly premium on top of Part B. Even plans with no premium charge copays, coinsurance, or deductibles when you use services, so your total out-of-pocket cost can be higher than Original Medicare if you use a lot of care.

Medicare Advantage plans also use networks, meaning you must see doctors and hospitals in the plan's network (except in emergencies). If you travel or see specialists outside the network, you may pay more or the plan may not cover the visit at all.

Income-based surcharges (IRMAA) explained

If your income is above a certain level, Medicare adds a surcharge to your Part B and Part D premiums. This surcharge is based on your modified adjusted gross income (MAGI) from two years before the current year. For example, in 2024, Medicare uses your 2022 income to calculate your surcharge.

The income thresholds are adjusted each year. In 2024, single filers with MAGI over $97,000 and married couples filing jointly with MAGI over $194,000 begin paying surcharges. The surcharge increases in steps as your income rises. Someone with MAGI of $120,000 (single) pays less than someone with MAGI of $150,000.

If you experience a major life event — such as retirement, loss of a spouse, or a significant drop in income — you can request that Medicare recalculate your surcharge using your current-year income instead of the two-year-old figure. You must file this request within 60 days of the event and provide documentation of the change.

How to find out what you will pay

Your Medicare Summary Notice (MSN) shows what you paid in premiums during the previous year. You receive this notice by mail each year. Your online Medicare account at Medicare.gov also displays your current premium amounts and enrollment status.

To estimate what you might pay for a specific Part D plan, use the Medicare Plan Finder tool on Medicare.gov. Enter your zip code, the drugs you take, and your preferred pharmacies, and the tool shows you available plans, their premiums, and your estimated out-of-pocket costs for those drugs.

If you think your surcharge is based on outdated income information, contact Social Security (for Part B surcharges) or Medicare (for Part D surcharges) to request a recalculation. You will need to provide proof of your life-changing event and your current income.

Getting help paying premiums

If your income is low, you may be able to get help paying Part B, Part D, or Medicare Advantage premiums through Medicaid or a Medicare Savings Program (MSP). These programs are run by your state, not by Medicare directly. Medicaid covers both Medicare premiums and cost-sharing (copays and deductibles) for people who meet income and asset limits. Medicare Savings Programs cover only premiums and some cost-sharing.

To find out whether you may have access to, contact your state Medicaid office or your State Health Insurance information Program (SHIP). SHIP is a free counseling service available in every state. You can find your local SHIP by calling 1-877-839-2675 or visiting the Eldercare Locator at eldercare.acl.gov.

Frequently Asked Questions

Do I have to pay for Part A if I worked less than 10 years?

Yes. If you have fewer than 30 quarters of Medicare-taxed work, you pay a monthly premium for Part A. If you have 30 to 39 quarters, you pay a lower premium. The exact amount changes each year. You can enroll in Part A even if you do not enroll in Part B.

What happens if I do not enroll in Part D when I first become may be able to access?

You may owe a late enrollment penalty for as long as you have Part D coverage. The penalty is roughly 1 percent of the national average Part D premium per month you were not enrolled. If you go without drug coverage for more than 63 days in a row, the penalty applies.

Can I change my Part D plan if the premium goes up?

Yes. During the annual enrollment period (October 15 to December 7), you can switch to a different Part D plan with a lower premium or better coverage for your drugs. You can also switch if you have a life-changing event like moving to a new state or losing employer coverage.

How do I know if I am paying an income surcharge?

Your Medicare Summary Notice lists your Part B premium. If it is higher than the standard amount, the difference is your surcharge. You can also log into your Medicare account at Medicare.gov to see your current premium breakdown.

What if my income dropped this year but Medicare is still charging me the old surcharge?

You can request a recalculation within 60 days of a life-changing event like retirement or job loss. Contact Social Security for Part B surcharge appeals or Medicare for Part D appeals. You will need to provide proof of the event and your current income.