Medicare Part A and Part B are not free, but most people pay nothing for Part A

Part A (hospital insurance) is free for most people at 65 if you or your spouse paid Medicare taxes for at least 10 years while working. You do not pay a monthly premium. You do pay a deductible when you enter a hospital — currently $1,676 per hospital stay — and copayments if you stay longer than 60 days.

Part B (medical insurance) costs a monthly premium. The standard amount in 2024 is $164.90 per month, though it rises each year and may be higher if your income is above a certain threshold. Part B also has a $240 annual deductible and you pay 20 percent of most doctor visits and tests after that.

If you did not work long enough to may have access to for free Part A, you can still buy it. The premium ranges from $278 to $505 per month depending on how many years you or your spouse worked. Most people enroll in both parts when they turn 65, but the timing matters — missing the important date can lock you into higher premiums for life.

Key Takeaways

  • Part A is free if you paid Medicare taxes for 10 years; Part B costs a monthly premium that changes each year.
  • You pay out-of-pocket costs even with both parts: a hospital deductible for Part A and 20 percent of doctor bills after the Part B deductible.
  • If your income is above $97,000 (single) or $194,000 (married), your Part B premium will be higher than the standard amount.
  • Enrolling late in Part B adds a 10 percent penalty to your premium for each year you delayed, and the penalty is permanent.

How Part A premiums work if you do not may have access to for free coverage

You may have access to for free Part A at 65 if you or your spouse paid Medicare taxes for at least 40 quarters (10 years) of work. If you fall short, you can still buy Part A, but it costs money every month.

The premium depends on how many quarters you or your spouse worked. If you have 30 to 39 quarters, the premium is $278 per month in 2024. If you have fewer than 30 quarters, it is $505 per month. These amounts change yearly. Once you enroll, you pay this premium for the rest of your life, so the cost compounds over time.

Some people choose not to buy Part A if they are still working and covered by an employer plan. That is a choice you can make, but if you wait past 65 to enroll, you will pay the penalty premium permanently.

Part B premiums and income-related adjustments

Everyone who enrolls in Part B pays a monthly premium. The standard premium in 2024 is $164.90, but if your income is above certain thresholds, you pay more. The thresholds are $97,000 for single filers and $194,000 for married couples filing jointly. Income is measured using your tax return from two years before enrollment.

If you earn above the threshold, Medicare adds a surcharge called an Income-Related Monthly Adjustment Amount (IRMAA). The surcharge can be $70 to $560 per month on top of the standard premium, depending on how much your income exceeds the threshold. This surcharge also applies to Part D (prescription drug coverage) and Part B together.

The premium amount changes every January. You receive a notice in December telling you what you will pay. If your income drops — because you retire, for example — you can ask Medicare to recalculate your premium based on your current income rather than the two-year-old tax return.

Out-of-pocket costs you pay even with Part A and Part B

Having both parts does not mean you pay nothing. Part A has a hospital deductible of $1,676 per benefit period (roughly per hospital stay). If you stay in the hospital longer than 60 days, you also pay copayments: $419 per day for days 61 to 90, and $838 per day for days 91 and beyond. After 150 days, Medicare stops paying and you pay all costs.

Part B requires you to pay a $240 annual deductible before Medicare starts paying its share. After you meet the deductible, you typically pay 20 percent of the cost of doctor visits, lab tests, imaging, and outpatient procedures. For some services like mental health visits, you pay 50 percent until you meet an out-of-pocket maximum.

Neither Part A nor Part B covers dental, vision, hearing aids, or long-term care. Many people buy Medigap (supplemental insurance) or Medicare Advantage (an alternative plan) to reduce these out-of-pocket costs, but those plans have their own premiums and rules.

Late enrollment penalties that are permanent

If you do not enroll in Part B when you first become may be able to access at 65, you pay a penalty. The penalty is 10 percent of the standard premium for each full year you delayed. If you delay three years, your premium is 30 percent higher than the standard amount. This penalty stays with you for life.

The only way to avoid the penalty is to have creditable coverage from an employer or union plan while you are working. If you are still employed and covered by your employer's health plan at 65, you can delay Part B without penalty. You must enroll within eight months of losing that coverage, or the penalty applies.

Part A does not have a late enrollment penalty if you do not buy it, but if you do buy it later, you pay the higher premium permanently. The same eight-month window applies: enroll within eight months of losing employer coverage to avoid the higher premium.

How to find out what you will actually pay

Your Part A and Part B costs depend on your work history, income, and when you enroll. The easiest way to see your specific costs is to create an account on Medicare.gov and view your enrollment options. You can also call Medicare at 1-800-MEDICARE (1-800-633-4227) and speak to someone who can calculate your premiums based on your situation.

If you are still working at 65 and covered by an employer plan, tell Medicare that when you enroll. This protects you from late-enrollment penalties. If your income changes after you enroll — because you retire or sell a business — contact Medicare to ask for a recalculation of your IRMAA surcharge.

Some people may have access to for Extra Help or Medicaid to pay Part B premiums and deductibles if their income is low. You can check whether you may have access to through your state Medicaid office or by calling 1-800-MEDICARE.

Frequently Asked Questions

Do I have to pay for Part A if I worked long enough?

No. If you or your spouse paid Medicare taxes for at least 10 years, Part A is free at 65. You do not pay a monthly premium, but you do pay the hospital deductible and copayments when you use hospital services.

What happens if I do not enroll in Part B at 65?

You will pay a 10 percent penalty on your Part B premium for each year you delayed, and that penalty is permanent. The only exception is if you were covered by an employer health plan while working. You must enroll within eight months of losing that coverage to avoid the penalty.

Can I get Part A and Part B for free?

Part A is free if you have 10 years of work history. Part B always costs a monthly premium, though the amount varies by year and income. If your income is low, you may may have access to for Medicaid or Extra Help to pay your Part B premium.

Why is my Part B premium higher than my friend's?

Your premium is higher if your income is above $97,000 (single) or $194,000 (married). Medicare adds a surcharge called IRMAA based on your tax return from two years ago. If your income has dropped since then, you can ask Medicare to recalculate.

Do Part A and Part B cover everything?

No. They do not cover dental, vision, hearing aids, or long-term care. You also pay deductibles and copayments for hospital stays and doctor visits. Many people buy supplemental insurance (Medigap) or choose Medicare Advantage to reduce these costs.