Medicare Part B costs you a monthly premium, an annual deductible, and a share of each doctor visit or service

Your Medicare Part B premium — the monthly charge — depends on your income. Most people pay $164.90 per month in 2024, but if you earned more than $97,000 as a single filer in 2022, you pay a higher amount. The Social Security Administration uses your tax return from two years back to set your premium, so changes in your income take time to show up in your bill.

Beyond the monthly premium, you also pay a $240 annual deductible before Medicare starts covering doctor visits and outpatient services. After you meet that deductible, you typically pay 20 percent of the cost for most services — doctor visits, lab tests, imaging, outpatient surgery — while Medicare covers the other 80 percent. These are the out-of-pocket costs that add up over the year.

Your actual total spending depends on how much medical care you use. Someone who sees a doctor twice a year will spend far less than someone managing multiple chronic conditions. That is why many people buy a Medigap policy (supplemental insurance) or join a Medicare Advantage plan to cap their costs — both options have their own premiums and rules.

Key Takeaways

  • The standard Part B premium is $164.90 per month in 2024, but you pay more if your income from two years ago exceeded $97,000 as a single filer.
  • You pay a $240 annual deductible, then 20 percent coinsurance on most services after that.
  • Your total out-of-pocket costs depend on how much care you use and whether you have supplemental coverage.
  • Income-related premiums are recalculated each year using your prior tax return, so changes in your earnings affect your bill with a two-year lag.
  • Medigap and Medicare Advantage plans offer different ways to manage Part B costs, each with separate premiums and coverage rules.

How income affects your Part B premium

If you filed taxes two years ago and your income was above a certain threshold, Medicare charges you an Income-Related Monthly Adjustment Amount (IRMAA) on top of the standard premium. For 2024, single filers who earned more than $97,000 in 2022 pay extra. Married couples filing jointly pay extra if their combined 2022 income exceeded $194,000.

The higher your income, the higher the surcharge. Someone who earned $150,000 in 2022 pays significantly more than someone who earned $100,000. Medicare uses tax brackets to calculate this, so the increase is not a flat amount — it steps up as income rises. If your income drops — because you retired, took a lower-paying job, or had a major life change — you can request that Medicare recalculate your premium using your current year's income instead of the two-year-old figure.

This recalculation is called a Life-Changing Event adjustment. You file a form with Social Security explaining what changed (retirement, marriage, death of a spouse, loss of income), and they review your current tax return. The process takes several weeks, so plan ahead if you know your income is dropping.

The annual deductible and coinsurance costs

Once you enroll in Part B, you face a $240 deductible each calendar year. This means the first $240 you spend on covered services comes entirely out of your pocket. After you reach that deductible, Medicare covers 80 percent of approved charges for most outpatient services, and you pay the remaining 20 percent.

That 20 percent coinsurance applies to doctor office visits, lab work, X-rays, physical therapy, and most other outpatient care. If your doctor charges $100 for an office visit and you have already met your deductible, you pay $20 and Medicare pays $80. If your doctor charges more than Medicare's approved amount, you may owe the difference — unless your doctor accepts Medicare's approved charge as payment in full, which most do.

Some services have different cost-sharing rules. Mental health visits, for example, may have different coinsurance amounts. Preventive services — like annual wellness visits, cancer screenings, and vaccinations — are covered at no cost to you once you meet your deductible, so you pay nothing for those visits.

What happens if you delay enrolling in Part B

If you do not enroll in Part B when you first become may be able to access at 65, you may face a late enrollment penalty for as long as you have Part B coverage. The penalty is 10 percent of the standard premium for each full 12-month period you were may be able to access but did not enroll. If you wait three years to sign up, your premium will be 30 percent higher than the standard rate — permanently.

There are exceptions. If you were still working and covered by your employer's health plan at 65, you can enroll in Part B without penalty during an eight-month window after you leave that job or lose the coverage. You must have been actively employed (not just receiving benefits from a former employer), and you need to show proof of that coverage when you enroll.

The enrollment window is strict. If you miss it, you can only enroll during the general enrollment period from January 1 to March 31 each year, and the late penalty applies. For this reason, it is worth confirming your enrollment status with Social Security or Medicare before your 65th birthday.

Medigap and Medicare Advantage as alternatives to standard Part B costs

Many people buy a Medigap policy (also called supplemental insurance) to reduce their out-of-pocket costs under standard Medicare. A Medigap plan pays some or all of the deductible, coinsurance, and copayments you would otherwise owe. You pay a separate monthly premium for Medigap — typically $100 to $300 per month depending on your age and the plan type — but in return, your costs at the doctor are much lower or zero.

Alternatively, you can join a Medicare Advantage plan (Part C), which replaces standard Medicare entirely. Medicare Advantage plans are run by private insurance companies and often have $0 or low premiums, but they use networks of doctors and require referrals for specialists. They also have their own deductibles and copayments, which are often lower than standard Medicare's coinsurance. The trade-off is less flexibility in choosing providers.

Both Medigap and Medicare Advantage have open enrollment periods and rules about when you can switch. Medigap has the most generous rules — you can usually buy a policy anytime, though your premium may be higher if you wait. Medicare Advantage has stricter enrollment windows. Understanding the costs and trade-offs of each option helps you choose the coverage that fits your budget and health needs.

How Part B premiums change year to year

Medicare recalculates Part B premiums every year based on the program's costs and the number of people enrolled. The standard premium amount changes annually — it was $144.60 in 2023 and rose to $164.90 in 2024. Social Security announces the new premium in the fall, and it takes effect the following January.

If you receive Social Security benefits, your Part B premium is deducted from your monthly check. If you do not receive Social Security yet, Medicare sends you a bill. If your premium increases and you believe it is wrong — perhaps because your income has changed — you have a window to request a review or appeal.

Income-related premiums also adjust each year as Medicare recalculates your income bracket using your most recent tax return. If your income dropped significantly, you may move into a lower bracket and pay less. If your income rose, you may pay more. These changes happen automatically unless you request a Life-Changing Event adjustment.

Keeping track of your Part B costs throughout the year

Your Medicare Summary Notice (MSN) arrives quarterly and shows what services you received, what Medicare paid, and what you owe. Review it carefully to catch billing errors or duplicate charges. If something looks wrong, contact Medicare at 1-800-MEDICARE to dispute it.

Many people use online tools to track their deductible progress. Once you meet your $240 annual deductible, your coinsurance kicks in, and you know you are in a different cost phase. Some people set aside money each month to cover their expected coinsurance, especially if they have ongoing treatments or regular doctor visits.

If your out-of-pocket costs are climbing and you do not have supplemental coverage, it may be worth exploring Medigap or Medicare Advantage during the next open enrollment period. Comparing plans takes time, but the savings can be substantial if you use a lot of medical services.

Frequently Asked Questions

Do I pay Part B premium if I am still working at 65?

Yes, you pay the premium even if you are working, unless you are covered by your employer's health plan and your employer has 20 or more employees. If your employer plan covers you, you can delay enrolling in Part B without penalty. Once you leave that job or lose the coverage, you have eight months to enroll without a late penalty.

Can I reduce my Part B premium if my income drops?

Yes. If you retire, lose income, or experience a major life change, you can request that Medicare recalculate your premium using your current year's income instead of the two-year-old tax return. File a form with Social Security explaining the change, and include your current tax return or other proof of income. The process takes several weeks.

What is the difference between the Part B deductible and coinsurance?

The deductible is a flat $240 you pay once per year before Medicare starts sharing costs. Coinsurance is the percentage you pay for each service after the deductible is met — typically 20 percent. So if you have a $100 doctor visit after meeting your deductible, you pay $20 coinsurance, not another deductible.

Does Medigap cover the Part B premium?

No. Medigap covers your deductible, coinsurance, and copayments under standard Medicare, but you still pay your Part B premium separately. You pay both the Part B premium to Medicare and the Medigap premium to the insurance company. Some Medigap plans also cover services that Medicare does not, like dental or vision.

What happens to my Part B costs if I move to a different state?

Your Part B premium does not change if you move. The premium is the same nationwide. However, if you have a Medigap or Medicare Advantage plan, you may need to switch plans because they are state-specific. Contact your plan before you move to understand your options in your new state.