Medicare Part B is not free at 65 — you pay a monthly premium
When you turn 65, you become may be able to access for Medicare Part A (hospital insurance), which is free if you or your spouse paid Medicare taxes for at least 10 years. Part B (medical insurance for doctor visits, outpatient care, and preventive services) requires a monthly premium that you pay out of your own pocket, even at 65.
The standard Part B premium changes each year. In 2024, the monthly premium is $164.90 for most people, though higher earners pay more through an income-related adjustment. You pay this premium whether you enroll when you first turn 65 or delay enrollment — and delaying can cost you more in the long run.
Part B also has an annual deductible (the amount you must pay before Medicare starts to help) and you pay 20 percent of the cost of most services after that. These out-of-pocket costs are separate from your monthly premium.
Key Takeaways
- Medicare Part B requires a monthly premium in 2024 of $164.90 for most people, which increases each year.
- Higher-income individuals pay a larger premium through an Income-Related Monthly Adjustment Amount (IRMAA) based on your tax return from two years prior.
- If you delay enrolling in Part B after you turn 65 without a valid reason, you will pay a permanent 10 percent penalty on your premium for each year you waited.
- Part B also includes an annual deductible and 20 percent coinsurance on most services, so the monthly premium is not your only cost.
- You can reduce your out-of-pocket costs by adding a Medigap policy or Medicare Advantage plan, though these have their own premiums and rules.
How the Part B premium is calculated
Your Part B premium depends on your income from two years ago. The Social Security Administration uses your Modified Adjusted Gross Income (MAGI) from your tax return to determine whether you pay the standard premium or a higher amount.
If your income is below the threshold (in 2024, $97,000 for single filers and $194,000 for married couples filing jointly), you pay the standard premium. If your income is above that, you pay the standard premium plus an Income-Related Monthly Adjustment Amount (IRMAA). The higher your income, the higher the adjustment — it can reach $560.50 or more per month for the highest earners.
This means your Part B cost can surprise you if your income was high in the year Medicare looks at. If your income drops later — because you retire, sell a business, or have another major life change — you can ask Social Security to recalculate your premium using your current income instead.
What happens if you delay Part B enrollment
You have a seven-month window to enroll in Part B without penalty: the three months before you turn 65, the month you turn 65, and the three months after. If you miss this window and do not have a valid reason (such as employer coverage), you will pay a permanent penalty.
The penalty is 10 percent of the standard Part B premium for each full year you delayed. If you waited three years to enroll, you would pay 30 percent more than the standard premium for the rest of your life. This penalty does not go away, even if you later switch plans or move to a different state.
The exception is if you or your spouse had employer health coverage while you were still working. In that case, you have eight months after that coverage ends to enroll in Part B without penalty. You will need to show proof of the employer coverage when you enroll.
Ways to reduce your Part B costs
The monthly premium is just one piece of what you pay for Part B. You also pay an annual deductible ($240 in 2024) and 20 percent of the cost of most services. For many people, these out-of-pocket costs add up quickly.
A Medigap policy (also called supplemental insurance) covers some or all of the costs that Medicare Part B does not pay — the deductible, coinsurance, and copayments. Medigap plans are sold by private insurance companies and have their own monthly premiums, but they can save you money if you use a lot of medical services. You can enroll in Medigap during your initial Medicare enrollment period without medical underwriting.
A Medicare Advantage plan (Part C) is an alternative to Original Medicare. It includes Part A and Part B coverage, usually with a lower or zero premium, but it has a network of doctors and requires referrals for specialists. Out-of-pocket costs can be lower or higher than Original Medicare depending on the plan and your health needs.
Income-related premiums and how to challenge them
If Social Security sends you a notice that your Part B premium is higher than the standard amount, the notice will explain why and show the income they used to calculate it. You have the right to challenge this if you believe the income is wrong or if your income has dropped since the year they looked at.
To challenge an IRMAA information, contact Social Security directly — not Medicare. You will need to provide documentation of your current income, such as recent tax returns, pay stubs, or proof of a major life event (marriage, divorce, death of a spouse, loss of income). Social Security can recalculate your premium retroactively if you may have access to.
Common life events that can lower your IRMAA include retirement, loss of income, death of a spouse, or divorce. You have 60 days from the date of the notice to request a recalculation, so act quickly if your situation has changed.
Part B costs for people with limited income
If your income is very low, you may be able to get help paying your Part B premium through a program called the Medicare Savings Program (MSP). This is run by your state, not by Medicare, and it pays some or all of your Part B premium, deductible, and coinsurance.
To find out whether you may have access to for the Medicare Savings Program in your state, contact your state Medicaid office or call 211 (a free referral service). Income limits vary by state, but generally you must have income below 150 to 200 percent of the federal poverty level. You will need to provide proof of income and citizenship.
Some states also offer other programs to help with Medicare costs, such as the may have access to Individual (QI) Program, which helps pay Part B premiums when you do not may have access to for the main Medicare Savings Program. These programs are free and do not affect your may be able to access for other benefits.
Frequently Asked Questions
Do I have to pay Part B premium if I'm still working at 65?
If you or your spouse are still working and have employer health coverage, you can delay Part B without penalty. You have eight months after your employment ends to enroll. However, you must enroll in Part A (hospital insurance) at 65 even if you have employer coverage, or you may face a penalty later.
Can my Part B premium go down if my income drops?
Yes. If your income drops due to retirement, loss of a job, or another major life event, you can ask Social Security to recalculate your IRMAA. You have 60 days from the notice date to request a recalculation. Bring documentation of your income change, such as a recent tax return or letter from your employer.
What's the difference between Part B premium and Part B costs?
The monthly premium is what you pay to have Part B coverage. Part B also has an annual deductible and 20 percent coinsurance on most services, which are separate costs you pay when you use care. A Medigap policy can help cover these additional costs.
If I turn 65 and don't enroll in Part B, what happens?
If you do not have employer coverage and miss your enrollment window, you will pay a permanent 10 percent penalty on your Part B premium for each year you delayed. This penalty stays with you for life, even if you move or change plans. Enroll as soon as you realize you missed the important date to limit the penalty.
Are there any situations where Part B is actually free?
No. Part B always requires a monthly premium, though the amount varies based on your income. If you have very low income, the Medicare Savings Program (run by your state) can pay your Part B premium for you, but the premium itself is not free.