Medicare premiums vary by the type of coverage you choose and your income

Medicare has four parts, and each one costs differently. Part A (hospital insurance) is free for most people at 65. Part B (doctor visits and outpatient care) costs a monthly premium that changes each year — in 2024 it was $174.70 for most people, but the amount depends on your income. Part D (prescription drugs) premiums vary by plan and range from roughly $7 to $100 per month. Part C (Medicare Advantage) replaces Parts A and B with a private plan; premiums can be $0 to several hundred dollars monthly, depending on the plan and your location.

Your actual cost also depends on whether you have other income, when you signed up, and whether you chose coverage late. Income affects Part B and Part D premiums through a system called Income-Related Monthly Adjustment Amounts (IRMAA). If you earn more than a certain threshold, you pay a higher premium. Late enrollment penalties can add to your monthly bill permanently.

Key Takeaways

  • Part A is free for most people; Part B costs around $174.70 monthly in 2024 but increases yearly and by income level.
  • Part D (drug coverage) premiums range from roughly $7 to $100 per month depending on which plan you choose.
  • If your income exceeds certain thresholds, you pay a surcharge on top of the standard Part B and Part D premiums.
  • Delaying Part B or Part D enrollment after you turn 65 can result in permanent penalty fees added to your monthly bill.
  • Medicare Advantage (Part C) plans often have $0 premiums but may have higher out-of-pocket costs when you use care.

Part A and Part B premiums

Part A covers hospital stays, skilled nursing facility care, hospice, and some home health services. Most people who worked and paid Medicare taxes for at least 10 years pay nothing for Part A. If you did not work long enough, you can buy Part A coverage; the premium in 2024 was $278 per month for those with 30–39 quarters of work history, or $505 per month for those with fewer than 30 quarters.

Part B covers doctor visits, lab tests, imaging, outpatient surgery, and durable medical equipment. The standard Part B premium in 2024 was $174.70 per month. This amount increases each year. You pay Part B premiums for as long as you have Medicare, even after you retire. If your modified adjusted gross income (MAGI) from two years prior exceeds $97,000 (single) or $194,000 (married filing jointly), you pay an income-related surcharge on top of the standard premium — the surcharge can range from $70 to $560 per month depending on your income bracket.

Part D prescription drug coverage premiums

Part D is optional coverage for prescription medications. You choose a plan from private insurers, and each plan has its own monthly premium. In 2024, Part D premiums ranged from about $7 to $100 per month, though some plans cost more. The premium depends on which drugs the plan covers, which pharmacies it uses, and which insurance company offers it. Plans in your area change every year, so the premium you pay this year may not be the same next year.

Like Part B, Part D premiums increase if your income is high. If your MAGI exceeds the thresholds, you pay an income-related surcharge on top of the plan premium — this surcharge can add $12 to $77 per month depending on your income level. If you do not sign up for Part D when you first become may be able to access and later enroll, you pay a permanent late enrollment penalty of roughly 1% of the national average Part D premium for each month you were not covered. That penalty stays with you for life.

Medicare Advantage (Part C) premiums

Medicare Advantage is an alternative to Original Medicare (Parts A and B). Private insurance companies offer these plans, which bundle hospital and doctor coverage into one plan. Many Medicare Advantage plans have $0 monthly premiums, meaning you pay nothing beyond your Part B premium to Medicare. However, some plans do charge a monthly premium on top of Part B — these can range from $50 to several hundred dollars per month depending on the plan and your location.

The trade-off is that Medicare Advantage plans often have lower premiums but higher out-of-pocket costs when you use care. You may pay copayments for doctor visits, coinsurance for hospital stays, and deductibles before coverage begins. Some plans include Part D drug coverage built in; others do not. You must use doctors and hospitals in the plan's network, except in emergencies. Plans change their premiums and benefits every year, so you should review your options during the annual enrollment period (October 15 to December 7).

Income-related surcharges (IRMAA)

If you earn more than a certain amount, Medicare charges you extra. The income threshold for 2024 was $97,000 for single filers and $194,000 for married couples filing jointly. Income is measured using your modified adjusted gross income (MAGI) from two years before the current year. So in 2024, Medicare looked at your 2022 income.

The surcharge applies to both Part B and Part D. For Part B, the surcharge ranges from $70 to $560 per month depending on how much your income exceeds the threshold. For Part D, the surcharge ranges from $12 to $77 per month. If your income changes — for example, you sell a house or receive a large inheritance — you can request a Life-Changing Event review to recalculate your surcharge. You have 60 days from the event to notify Social Security.

Late enrollment penalties

If you do not sign up for Part B when you first become may be able to access (usually at 65), you pay a permanent penalty of 10% of the standard premium for each 12-month period you were not covered. If you waited two years, your penalty would be 20% of the standard premium added to your monthly bill for life. The only exceptions are if you had other health coverage through an employer or union, or if you are a federal employee.

Part D has a similar penalty: roughly 1% of the national average Part D premium for each month you were not covered. This penalty also stays with you permanently. If you did not have drug coverage and did not have other creditable coverage (such as from an employer plan), the penalty applies when you later enroll. The penalty is calculated based on how long you went without coverage, so delaying enrollment is costly.

How premiums change year to year

Medicare premiums increase almost every year. Part B and Part D premiums are adjusted based on inflation and the cost of medical care. The Centers for Medicare & Medicaid Services (CMS) announces the new premiums each fall, and they take effect on January 1. Your income-related surcharges also change if your income changes, though the adjustment is based on your income from two years prior.

You receive a notice called the Initial Enrollment Notice (IEN) or Annual Notice of Change (ANOC) in the fall that shows your new premiums for the coming year. If you are on a Medicare Advantage plan, you receive a separate notice showing any changes to that plan's premium, deductible, and covered services. Review these notices carefully, because they tell you whether your costs are going up and whether your plan is changing in ways that matter to you.

Frequently Asked Questions

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

Yes. Once you enroll in Medicare Part B, you pay the monthly premium regardless of whether you work. However, if you are still working and have health coverage through your employer, you may be able to delay Part B enrollment without penalty. You must have group health plan coverage based on your current employment, and you should notify Medicare when you stop working so you can enroll without penalty.

What happens if I cannot afford my Medicare premiums?

If your income is low, you may may have access to for programs that help pay premiums. The Medicare Savings Program (MSP) can pay your Part B and Part D premiums if you meet income limits. Extra Help is a federal program that covers Part D premiums and cost-sharing for people with limited income and resources. Contact your state Medicaid office or call 1-800-MEDICARE to learn whether you may have access to.

Can my Part B premium change if my income drops?

Yes, but with a delay. Your surcharge is based on your income from two years prior. If your income drops significantly — for example, you retire or have a major life event — you can request a Life-Changing Event review within 60 days. Social Security will recalculate your surcharge based on your current income, which may lower your premium.

Are there any months when I do not have to pay Part B premiums?

No. Part B premiums are due every month you have Medicare Part B coverage. However, if you are receiving Social Security benefits, your Part B premium is usually deducted automatically from your monthly check. If you are not yet receiving Social Security, you receive a bill from Medicare each month.

What is the difference between the standard Part B premium and the surcharge?

The standard Part B premium is what most people pay — in 2024 it was $174.70 per month. The surcharge (IRMAA) is an additional amount you pay if your income exceeds the threshold. For example, if the standard premium is $174.70 and your surcharge is $70, you pay $244.70 total. The surcharge is based on your income level and can range from $70 to $560 per month.