Medicare premiums are the monthly fees you pay to keep your coverage active

A Medicare premium is the amount you pay each month to have Medicare insurance. Think of it like a subscription fee — you pay it regularly to stay enrolled. Most people pay premiums for Part B (doctor visits and outpatient care) and Part D (prescription drugs). Part A (hospital care) is usually free if you or your spouse paid Medicare taxes while working.

The amount you pay depends on which parts of Medicare you have, when you signed up, and how much income you earn. Premium amounts change each year, and the government announces new rates in the fall for the year ahead. Your premium is typically taken directly from your Social Security check, though you can arrange to pay it another way if you prefer.

Key Takeaways

  • Part A (hospital insurance) has no monthly premium for most people who worked and paid Medicare taxes.
  • Part B (medical insurance) has a standard monthly premium that increases each year, with higher premiums if you enroll late or earn above a certain income.
  • Part D (prescription drug coverage) premiums vary by plan and insurance company, so comparing plans each year can lower your cost.
  • Your premium is usually deducted automatically from your Social Security payment each month.

Part A premiums: Hospital insurance costs

Most people do not pay a monthly premium for Part A because they earned enough work credits while employed. You need 40 work credits (roughly 10 years of work) to may have access to for premium-free Part A. If you or your spouse paid Medicare taxes during your working years, you almost certainly have these credits.

If you do not have 40 work credits, you can still enroll in Part A and pay a monthly premium. The premium amount varies depending on how many credits you have — those with 30 to 39 credits pay a higher amount than those with fewer than 30 credits. You can check your work credits by creating an account on the Social Security website or calling Social Security at 1-800-772-1213.

Part B premiums: Doctor and outpatient care

Part B has a standard monthly premium that applies to most people. This amount increases each year based on the cost of medical care. For 2024, the standard premium is $164.90 per month, but your actual premium may be higher or lower depending on your income and when you enrolled.

If you delay enrolling in Part B after you first become may be able to access, you pay a late enrollment penalty — an extra percentage added to your premium for as long as you have Part B. The penalty is 10 percent of the standard premium for each full year you delayed. For example, if you waited three years to enroll, you would pay 30 percent more than the standard premium. This penalty does not go away, so enrolling on time saves money over your lifetime.

If your income is above a certain threshold, you pay an Income-Related Monthly Adjustment Amount (IRMAA) on top of your standard premium. This means higher-income beneficiaries pay more. The income thresholds change each year, and they are based on your income from two years prior. If your income drops because you retire or have a major life change, you can ask Medicare to recalculate your IRMAA.

Part D premiums: Prescription drug coverage

Part D premiums vary widely because many insurance companies offer Part D plans, and each sets its own price. A plan that costs $15 per month in one year might cost $18 the next year. Comparing plans during the annual enrollment period (October 15 to December 7) can help you find a lower-cost option.

Like Part B, Part D has a late enrollment penalty if you go without creditable drug coverage for more than 63 days after you first become may be able to access. The penalty is 1 percent of the national average Part D premium for each month you were without coverage, and it is added to your premium permanently. If you had drug coverage through an employer or union, that counts as creditable coverage and you do not owe a penalty.

Some people with lower incomes may receive help paying Part D premiums through the Low-Income Subsidy (LIS) program, also called "Extra Help." This program can reduce or eliminate your Part D premium and lower your out-of-pocket drug costs. You can learn more about LIS by calling 1-800-MEDICARE or visiting Medicare.gov.

How premiums are paid and when they change

Your Medicare premium is usually deducted automatically from your Social Security payment each month. If you do not receive Social Security, Medicare sends you a bill. You can change how you pay by contacting Medicare at 1-800-MEDICARE or through your Medicare account online.

Premium amounts are set by the federal government and announced each October for the following year. The Part B standard premium, Part D average premium, and income thresholds for IRMAA all change annually. You will receive a notice in the mail showing your new premium amount before it takes effect on January 1.

Medigap and Medicare Advantage premiums

If you enroll in a Medigap plan (supplemental insurance that covers costs Medicare does not), you pay a separate premium to the insurance company selling the plan. Medigap premiums are not set by the government — each company prices its own plans. You can shop for Medigap plans during your enrollment period and switch plans if you find a better rate.

If you choose Medicare Advantage (Part C) instead of Original Medicare, you still pay your Part B premium to Medicare, but you may pay an additional premium to the Medicare Advantage plan itself. Many Medicare Advantage plans have no additional premium, though you pay copays and coinsurance when you use care. Medicare Advantage plans also include Part D drug coverage, so you do not pay a separate Part D premium.

Income-related premiums and how to report changes

If your income is higher than the IRMAA threshold, you receive a notice showing your adjusted premium amount. The thresholds are based on your Modified Adjusted Gross Income (MAGI) from two years before. For 2024, the income thresholds start at $97,000 for single filers and $194,000 for married couples filing jointly, but these amounts change each year.

If you have a major life event — such as retirement, a death in the family, or a significant drop in income — you can ask Medicare to recalculate your IRMAA. You must report the change within 60 days of the event. Contact Medicare at 1-800-MEDICARE or submit a form online through your Medicare account to request a recalculation.

Frequently Asked Questions

Do I have to pay a premium for Part A?

Most people do not pay a Part A premium because they earned 40 work credits during their working years. If you do not have 40 credits, you can still enroll in Part A but will pay a monthly premium. The amount depends on how many credits you have.

What happens if I enroll in Part B late?

You pay a late enrollment penalty of 10 percent of the standard premium for each full year you delayed enrolling. This penalty is added to your premium permanently, so enrolling as soon as you are may be able to access saves money over time.

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

Yes. During the annual enrollment period from October 15 to December 7, you can switch to a different Part D plan with a lower premium. You can also switch if you have a major life change, such as a drop in income or loss of other drug coverage.

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

Your premium may be higher because of your income. If your income is above the IRMAA threshold, you pay an extra amount on top of the standard premium. The threshold changes each year, and premiums are based on your income from two years prior.

How do I know if I may have access to for help paying my premiums?

If your income is low, you may may have access to for the Low-Income Subsidy program (Extra Help) for Part D, or Medicaid for help with Part B and Part A premiums. Contact your state Medicaid office or call 1-800-MEDICARE to learn what programs may be available in your state.