Medicare does not have an income limit for enrollment

Medicare is available to nearly all Americans age 65 and older, regardless of how much money you earn or have in savings. There is no income threshold that disqualifies you from joining Part A (hospital insurance) or Part B (medical insurance). You pay the same premiums as everyone else in your age group, whether you earn $20,000 a year or $200,000.

However, your income does affect what you pay for premiums and out-of-pocket costs. Higher earners pay more for Part B and Part D (prescription drug coverage) through a system called Income-Related Monthly Adjustment Amounts, or IRMAA. This means income limits matter for your costs, even though they do not block you from joining Medicare.

Income also determines whether you can access Medicare Savings Programs and Extra Help with prescription drugs — two programs that reduce your out-of-pocket expenses. These programs do have income cutoffs, and understanding them can save you hundreds of dollars per year.

Key Takeaways

  • You can enroll in Medicare at 65 regardless of income, but higher income triggers higher Part B and Part D premiums through IRMAA.
  • Medicare Savings Programs and Extra Help with drug costs have income limits that vary by state and change each year.
  • Income for Medicare purposes includes Social Security, pensions, interest, dividends, and rental income — not just wages.
  • IRMAA is based on your tax return from two years prior, so a recent drop in income may not lower your premiums when ready.

How IRMAA raises your Part B and Part D premiums

If your income exceeds certain thresholds, Medicare adds a surcharge to your monthly Part B premium and your Part D premium. The thresholds depend on your filing status and the income reported on your federal tax return from two years before. For 2024, single filers with modified adjusted gross income above $97,000 begin paying extra; married couples filing jointly start paying more at $194,000.

The surcharge increases in steps as your income rises. A single person earning $110,000 pays more than someone earning $98,000, and someone earning $150,000 pays more still. The highest earners can pay three or four times the standard Part B premium. These amounts change yearly, and Medicare sends you a notice each fall showing what you will pay the following year.

The income figure Medicare uses is your Modified Adjusted Gross Income (MAGI), which is your adjusted gross income plus tax-exempt interest. This is not the same as your total income or your taxable income — it is a specific line that Medicare calculates from your tax return.

Medicare Savings Programs and their income limits

Three programs — may have access to Medicare Beneficiary (QMB), Specified Low-Income Medicare Beneficiary (SLMB), and may have access to Individual (QI) — help pay your Part B premiums, deductibles, and copayments if your income is low enough. These are run by your state, not by Medicare directly, and income limits vary by state.

In most states, QMB covers people with income up to 100 percent of the federal poverty level; SLMB covers up to 120 percent; QI covers up to 135 percent. For 2024, the federal poverty level for a single person is roughly $1,100 per month, so QMB in most states covers individuals earning under about $1,100 monthly. Married couples have higher thresholds. Your state may set its own limits within federal guidelines, so the exact cutoff depends on where you live.

You must contact your state Medicaid office to learn the current limits and to request coverage. Medicare does not handle these programs — your state does. You can find your state Medicaid office through the Centers for Medicare & Medicaid Services website or by calling 1-800-MEDICARE.

Extra Help with prescription drug costs and income limits

Extra Help (also called the Low-Income Subsidy program) reduces what you pay for Part D premiums, deductibles, and copayments. The income limit for 2024 is 150 percent of the federal poverty level — roughly $1,650 per month for a single person, or $2,200 for a married couple. These limits increase slightly each year.

You can explore for Extra Help through Social Security, online at SSA.gov, or by calling 1-800-772-1213. Social Security will tell you whether your income qualifies and, if so, will enroll you automatically in a Part D plan if you do not already have one. The process takes about 15 minutes, and you can do it over the phone.

Unlike Medicare Savings Programs, Extra Help is federal, so the income limit is the same in every state. However, your state may also run its own prescription drug information programs with different income limits, so it is worth checking both.

What counts as income for Medicare purposes

Medicare counts more than just wages. Your income includes Social Security benefits, pensions, interest from savings accounts and bonds, dividends from stocks, rental income, and income from self-employment. It does not include the return of your own principal — for example, if you withdraw money from a savings account you already own, that is not counted as income.

For IRMAA and Extra Help, Medicare uses your Modified Adjusted Gross Income from your federal tax return. If you did not file a tax return that year, Medicare may use your Social Security statement or other records to estimate your income. If your income has dropped significantly since your tax return was filed, you can request a recalculation, though you will need to provide recent pay stubs or other proof.

What to do if your income has changed

If your income dropped because you retired, lost a job, or experienced a major life change, you can ask Medicare to recalculate your IRMAA based on your current income rather than your two-year-old tax return. This is called a Life-Changing Event appeal. You must file it within 60 days of the event and provide documentation — a termination letter, divorce decree, or similar proof.

For Extra Help and Medicare Savings Programs, you can update your income at any time by contacting your state Medicaid office or Social Security. These programs recalculate your status annually, so if your income drops below the limit in a new year, you become newly covered.

If your income rose and you are now paying IRMAA, you cannot appeal unless a life-changing event caused the rise. You will pay the higher amount until your income drops or until your tax return from two years prior no longer reflects that higher income.

State variations in Medicaid and Medicare Savings Programs

Each state sets its own income limits for Medicare Savings Programs and may run additional programs you have not heard of. Some states cover people up to 150 percent of poverty; others stop at 100 percent. Some states have waiting lists; others enroll year-round. A few states do not run a QI program at all.

The only way to know what is available in your state is to contact your state Medicaid office directly or call 1-800-MEDICARE and ask for a referral. Do not assume your state's limits match your neighbor's state — they often do not. If you have recently moved, your new state may offer different coverage.

Frequently Asked Questions

Can I be denied Medicare because my income is too high?

No. Medicare enrollment is not based on income. You can enroll at 65 regardless of how much you earn. However, higher income means higher premiums for Part B and Part D through IRMAA.

Does Social Security count as income for Medicare?

Yes. Your Social Security benefits are included in the income calculation for IRMAA, Extra Help, and Medicare Savings Programs. This is true even if you do not pay income tax on your benefits.

What if I am still working at 65 — does that affect my Medicare income limits?

Your wages are counted as income for IRMAA and Extra Help purposes. If you are working and earning above the thresholds, you will pay higher premiums. There is no penalty for working while on Medicare, but your income will be factored into what you pay.

Can I lower my IRMAA by reducing my income?

Not when ready. IRMAA is based on your tax return from two years prior, so reducing your income now will not lower your premiums until two years have passed. If you experience a major life change (retirement, job loss, divorce), you can request a recalculation sooner.

How often do Medicare income limits change?

IRMAA thresholds and Extra Help limits change each year, usually in October or November. Medicare sends you a notice showing your new premiums for the following year. Medicare Savings Program limits also change yearly and vary by state.