Medicare costs vary by the plan you choose and your income level

Medicare has two main costs: a monthly premium (what you pay to enroll) and out-of-pocket costs when you use care (copays, coinsurance, deductibles). The premium depends on which part of Medicare you use. 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 starts at $164.90 per month for most people, but rises to $177.90 if your income was above a certain threshold two years prior. Part D (prescription drugs) premiums vary by plan and range from roughly $7 to $100+ per month depending on which insurer you choose.

If you enroll in a Medicare Advantage plan (Part C) instead of Original Medicare, you pay Part B premium plus the Advantage plan's own premium, which can be $0 to $300+ per month. The trade-off is that Advantage plans usually have lower out-of-pocket maximums but narrower networks of doctors.

Your actual monthly cost also depends on whether you have other insurance (employer coverage, Medicaid, or a Medigap supplemental plan). If you delay enrolling in Part B or Part D after you turn 65, you may face a permanent penalty that raises your premium for life.

Key Takeaways

  • Part A (hospital) is free for most people; Part B (doctor visits) costs $164.90 to $177.90 per month in 2024 depending on your prior income.
  • Part D (prescription drugs) premiums range from about $7 to over $100 per month and vary by plan and pharmacy.
  • Medicare Advantage plans may have $0 premium but charge copays and coinsurance; Original Medicare plus Medigap costs more upfront but covers more providers.
  • Delaying Part B or Part D enrollment after 65 triggers a permanent penalty that increases your premium by 10% per year of delay.
  • Your income from two years ago determines whether you pay a higher Part B premium and affects Part D costs.

Part A and Part B premiums in 2024

Part A is free if you or your spouse paid Medicare taxes for at least 10 years while working. If you did not meet that requirement, you can buy Part A for up to $278 per month in 2024. Most people do not pay a Part A premium.

Part B premium is $164.90 per month for 2024 if your modified adjusted gross income (MAGI) from two years ago was $97,000 or less (single) or $194,000 or less (married filing jointly). If your income was higher, you pay a surcharge called an Income-Related Monthly Adjustment Amount (IRMAA). The surcharge ranges from $41.50 to $560.50 per month depending on how much your income exceeded the threshold. The IRS sends you a notice in the mail showing your income bracket and your exact Part B premium.

You pay Part B premium whether you use Medicare or not. If you are still working and have employer health insurance, you may be able to delay Part B without penalty, but you must tell Medicare in writing that you are doing so.

Part D prescription drug plan costs

Part D premiums are set by each insurance company and change every January. In 2024, premiums range from roughly $7 to $100+ per month depending on the plan. You choose a plan during the annual enrollment period (October 15 to December 7 each year), and the plan you pick determines your monthly premium and which drugs are covered.

Beyond the premium, you also pay out-of-pocket when you fill a prescription: a copay or coinsurance for each drug, depending on the plan's formulary (list of covered drugs). Most plans have a deductible (usually $0 to $545 in 2024) that you must meet before the plan starts paying. Once you and the plan together spend $5,030 on drugs in a year, you enter the "donut hole" — a gap where you pay more out-of-pocket until your total spending reaches $7,860, at which point catastrophic coverage kicks in and the plan pays most costs.

If your income is low, you may be may be able to access for Extra Help, a federal program that covers Part D premiums and reduces your out-of-pocket drug costs. You can check whether you may have access to by contacting Social Security or your local Area Agency on Aging.

Medicare Advantage plan premiums and costs

Medicare Advantage (Part C) is an alternative to Original Medicare. You still pay your Part B premium to Medicare, but you also enroll in an Advantage plan run by a private insurer. Many Advantage plans charge $0 premium on top of Part B, though some charge $50 to $300+ per month. The trade-off is that Advantage plans have copays and coinsurance for every visit, and you must use doctors and hospitals in the plan's network.

Advantage plans include prescription drug coverage (Part D) built in, so you do not buy a separate Part D plan. They also have an out-of-pocket maximum — in 2024, this is capped at $8,050 per year for in-network care. Once you hit that limit, the plan covers 100% of in-network costs for the rest of the year. Original Medicare has no out-of-pocket maximum, which is why many people buy a Medigap supplemental plan.

Advantage plans change their premiums, copays, and networks every January. If you enroll in an Advantage plan, you have one month each year (January) to switch to a different plan or back to Original Medicare without penalty.

Medigap supplemental insurance costs

If you stay on Original Medicare (Part A and Part B), you can buy a Medigap policy from a private insurer to cover the copays, coinsurance, and deductibles that Medicare does not pay. Medigap premiums vary widely by insurer, state, and plan type — they can range from $100 to $400+ per month. The most popular plans are Plan G and Plan N.

Medigap is separate from Part D; you still need to enroll in a Part D plan for drug coverage. The advantage of Medigap is that you can see any doctor or hospital that accepts Medicare, and you have predictable costs. The disadvantage is that your total monthly cost (Part B + Medigap + Part D) is usually higher than an Advantage plan upfront, though you may spend less if you use a lot of care.

You have a six-month window after you turn 65 and enroll in Part B to buy Medigap without medical underwriting. If you wait longer, insurers can deny you or charge more based on your health history.

How income affects your Medicare costs

Your income from two years ago determines your Part B premium and your Part D premium. If your income rises, you do not see the higher premium until two years later. If your income drops — because you retired, lost a job, or had a major life change — you can ask Medicare to recalculate your premium based on your current income. This is called a life-changing event and includes retirement, divorce, death of a spouse, or loss of employer coverage.

To request a recalculation, contact Social Security with proof of the event (a retirement letter, divorce decree, or termination notice). Medicare will then use your current-year income instead of the two-year-old figure, which may lower your premium.

If you have Medicaid in addition to Medicare, your state may cover your Part B and Part D premiums, and you may pay little or nothing out-of-pocket. Contact your state Medicaid office to learn what your state covers.

When you delay enrollment and face penalties

If you do not enroll in Part B when you first become may be able to access at 65, you pay a permanent 10% penalty on your Part B premium for each year you delayed. For example, if you delay Part B for three years, you pay 30% more than the standard premium for the rest of your life. The same rule applies to Part D: if you go 63 or more days without creditable drug coverage, you pay a 1% penalty per month of delay, also for life.

There are exceptions: if you have employer health insurance or are still working, you may be able to delay Part B without penalty. If you have creditable drug coverage from an employer or union, you can delay Part D. You must tell Medicare in writing that you are delaying based on these exceptions, or the penalty will explore anyway.

Frequently Asked Questions

Does everyone pay the same Part B premium?

No. If your income from two years ago was above $97,000 (single) or $194,000 (married), you pay a surcharge on top of the base $164.90 premium. The surcharge ranges from $41.50 to $560.50 per month depending on your income bracket. Married couples filing separately pay the surcharge if income was above $97,000.

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

Yes. Every year during open enrollment (October 15 to December 7), you can switch to a different Part D plan, switch to a Medicare Advantage plan that includes drug coverage, or drop Part D entirely if you have other creditable coverage. Changes take effect January 1.

What happens if I cannot afford my Medicare premiums?

If your income is low, you may be may be able to access for Medicaid, which can pay your Part B and Part D premiums. You can also ask for a recalculation of your IRMAA surcharge if your income dropped due to retirement or job loss. Contact your state Medicaid office or Social Security to explore options.

Is there a difference in cost between Original Medicare and Medicare Advantage?

Original Medicare has a lower upfront cost (Part B premium only, plus Medigap if you buy it), but higher out-of-pocket costs when you use care because there is no out-of-pocket maximum. Medicare Advantage often has $0 or low premium but higher copays per visit and an annual out-of-pocket cap. The best choice depends on how much care you expect to use and which doctors you want to see.

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

If you or your spouse paid Medicare taxes for at least 10 years while working, Part A is free. If you did not meet that requirement, you can buy Part A for up to $278 per month in 2024. You can check your work history by creating an account on ssa.gov.