Medicare premiums vary by the type of coverage you choose and your income

There is no single "average" Medicare premium because what you pay depends on which parts of Medicare you enroll in, whether you choose Original Medicare or a Medicare Advantage plan, and how much you earned in prior years. Part A (hospital insurance) has no monthly premium for most people. Part B (medical insurance) costs $164.90 per month in 2024 for most enrollees, though higher earners pay more. Part D (prescription drug coverage) premiums vary widely by plan and location. Medicare Advantage plans (Part C) often have no premium or a low one, but they replace Parts A and B.

Income affects what you pay. If your modified adjusted gross income from two years ago exceeds certain thresholds, you pay a higher amount called an Income-Related Monthly Adjustment Amount (IRMAA). For 2024, single filers earning over $97,000 and married couples earning over $194,000 pay higher Part B and Part D premiums. These thresholds change each year.

Key Takeaways

  • Part A has no premium for most people who worked and paid Medicare taxes; Part B costs $164.90 monthly in 2024 for standard enrollees.
  • Part D premiums range from roughly $7 to $100+ per month depending on the plan and your location, and you choose a new plan each year during open enrollment.
  • Medicare Advantage plans often charge little or no monthly premium but use a different network of doctors and hospitals than Original Medicare.
  • If you earned more than $97,000 (single) or $194,000 (married) two years ago, you pay extra on top of the standard Part B and Part D premiums.
  • Your actual out-of-pocket costs also include deductibles, copays, and coinsurance, which differ between Original Medicare and Medicare Advantage.

Part A and Part B premiums for 2024

Part A covers hospital stays, skilled nursing facility care, hospice, and some home health services. Most people age 65 and older do not pay a monthly premium for Part A because they or their spouse paid Medicare taxes while working. If you did not work long enough to may have access to for premium-free Part A, you can buy it. The premium ranges from $278 to $556 per month in 2024, depending on how many quarters of Medicare tax you paid.

Part B covers doctor visits, outpatient care, medical equipment, and some preventive services. The standard monthly premium is $164.90 in 2024. This amount increases each year based on the cost of living. You pay this premium whether you use Medicare or not, so it starts when you turn 65 and enroll. If you delay enrolling in Part B after age 65 without other may have access to coverage, you may pay a permanent penalty of 10 percent for each year you delayed.

Part D prescription drug coverage costs

Part D is optional coverage for prescription medications. You choose a plan from private insurers during the annual enrollment period (October 15 to December 7). Premiums vary by plan and by where you live. In 2024, Part D premiums typically range from about $7 to $100 or more per month, though some plans cost less and others cost more. The plan you choose one year may not be the cheapest option the next year, so comparing plans annually can save you money.

Part D also includes a coverage gap (sometimes called the "donut hole") where you pay more out of pocket after you and your plan spend a certain amount on drugs. In 2024, once you and your plan have spent $5,830 on covered drugs, you enter the gap and pay 25 percent of the cost of brand-name drugs and generics until your out-of-pocket spending reaches $7,050. After that, you pay a small copay for the rest of the year. These dollar amounts change annually.

Medicare Advantage plan premiums and costs

Medicare Advantage (Part C) is an alternative to Original Medicare offered by private insurers. Many plans charge no monthly premium beyond what you already pay for Part B, though some charge $10 to $100 or more per month. The trade-off is that you use the plan's network of doctors and hospitals, and you typically pay copays or coinsurance when you see a doctor or get care. You must have Part A and Part B to enroll in a Medicare Advantage plan.

Medicare Advantage plans often include Part D prescription drug coverage built in, so you do not buy Part D separately. Some plans also cover dental, vision, hearing, or fitness benefits that Original Medicare does not. However, if you travel outside the plan's service area, you may not be covered except in emergencies. Each year during open enrollment, you can switch to a different Medicare Advantage plan or return to Original Medicare.

How income affects your premiums (IRMAA)

If your modified adjusted gross income from two years prior exceeds certain thresholds, you pay an Income-Related Monthly Adjustment Amount on top of your Part B and Part D premiums. For 2024, the thresholds are $97,000 for single filers and $194,000 for married couples filing jointly. If you earn above these amounts, you pay an extra $82.50 to $329.70 per month for Part B and an extra amount for Part D depending on your income bracket and plan.

IRMAA is based on your tax return from two years ago. If your income drops due to retirement, divorce, or death of a spouse, you can request a reduction in your IRMAA by submitting a form to Social Security and providing documentation of the life event. This is called a "deemed filing" adjustment and can lower what you pay when ready rather than waiting two years for your income to cycle through the system.

Costs beyond the monthly premium

Your monthly premium is only part of what you pay for Medicare. Original Medicare includes a Part B deductible of $240 in 2024, which you pay before Medicare starts covering doctor visits and outpatient services. After you meet the deductible, you typically pay 20 percent of the cost of covered services, and Medicare pays 80 percent. There is no out-of-pocket maximum in Original Medicare, so your costs can be high if you need a lot of care.

Medicare Advantage plans have different cost structures. They usually have lower or no deductibles, but you pay copays (a fixed amount like $25 for a doctor visit) or coinsurance (a percentage of the cost). Most Medicare Advantage plans have an out-of-pocket maximum, which means once you spend a certain amount on copays and coinsurance in a year, the plan covers the rest. This maximum varies by plan but is capped by Medicare at $8,050 for in-network care in 2024.

How to compare and plan for your costs

The Medicare Plan Finder tool on Medicare.gov lets you enter your medications and doctors to see which plans cover them and what your costs would be. You can use this tool during open enrollment (October 15 to December 7 each year) to compare Part D plans and Medicare Advantage plans side by side. The tool shows your estimated annual costs, including premiums, deductibles, and copays, so you can see the full picture rather than just the monthly premium.

If you are turning 65 soon, you have a seven-month initial enrollment period centered on your birthday month to enroll in Medicare without penalty. If you miss this window and do not have other may have access to coverage, you pay a permanent late-enrollment penalty on top of your regular premium. Planning ahead and understanding your options can help you choose coverage that fits your health needs and budget.

Frequently Asked Questions

Why do some people pay more for Part B than $164.90?

If your income from two years ago was above $97,000 (single) or $194,000 (married), you pay an extra amount called IRMAA. The higher your income, the more you pay. This extra amount can range from $82.50 to $329.70 per month on top of the standard $164.90 premium.

Can I change my Part D plan if I find a cheaper one?

Yes, during the annual open enrollment period from October 15 to December 7, you can switch to a different Part D plan or drop it altogether. Changes take effect January 1. Outside this window, you can only change plans if you have a may have access to life event like moving to a new state or losing other drug coverage.

Do I have to pay for Part A if I never worked?

If you did not work long enough to may have access to for premium-free Part A, you can buy it. The monthly premium in 2024 ranges from $278 to $556 depending on how many quarters of Medicare tax you paid. If you cannot afford it, you may be able to get help through Medicaid or other programs.

What happens if I do not enroll in Medicare when I turn 65?

If you delay enrolling in Part B or Part D after your initial enrollment period without other may have access to coverage, you pay a permanent late-enrollment penalty. For Part B, the penalty is 10 percent of the standard premium for each year you delayed. For Part D, the penalty is 1 percent of the national average premium for each month you delayed.

Are there programs that help pay Medicare premiums?

Yes. The Medicare Savings Programs help pay Part B and Part D premiums for people with limited income and resources. Medicaid may also help. You can contact your state Medicaid office or call 1-800-MEDICARE to learn if you may be may be able to access for these programs.