What Medicare premiums are and who pays them

A Medicare premium is the monthly fee you pay to have Medicare coverage. Most people pay premiums for Part B (doctor visits and outpatient care) and Part D (prescription drugs). You may also pay a premium if you choose Part C (Medicare Advantage) or buy a Medigap policy to fill gaps in Original Medicare.

The amount you pay depends on which parts of Medicare you have, your income, and when you first became may be able to access. Unlike employer health insurance, Medicare premiums are not the same for everyone — they are based on your individual situation and can change year to year.

Premiums are usually taken directly from your Social Security check if you receive one. If you do not receive Social Security, Medicare sends you a bill each month.

Key Takeaways

  • Part B premiums in 2024 are $174.70 per month for most people, but higher earners pay more based on their income from two years ago.
  • Part D premiums vary by plan and insurance company, ranging from zero to over $100 per month depending on which prescription drug plan you choose.
  • Part C (Medicare Advantage) premiums vary widely and some plans charge zero premium, though you still pay Part B and may pay more out-of-pocket for care.
  • If you delay signing up for Part B or Part D when you first become may be able to access, you may pay a permanent penalty on top of your regular premium.
  • Your Part B premium may be higher if your income was above a certain threshold two years ago, a rule called Income-Related Monthly Adjustment Amount (IRMAA).

Part B premiums and how income affects what you pay

Part B covers doctor visits, lab tests, imaging, and outpatient hospital services. The standard Part B premium for 2024 is $174.70 per month, but you may pay more if your income was high two years ago.

This income-based surcharge is called IRMAA (Income-Related Monthly Adjustment Amount). Medicare looks at your tax return from two years prior — for example, in 2024 Medicare uses your 2022 income. If your modified adjusted gross income (MAGI) exceeds certain thresholds, you pay the standard premium plus an additional amount. For 2024, single filers who earned more than $103,000 in 2022 begin paying extra. The surcharge can range from about $70 to $560 per month on top of the base premium, depending on how much your income exceeded the threshold.

If your income drops due to retirement, job loss, or a major life event, you can request that Medicare recalculate your premium using your current year's income instead. You must file a form called the Medicare Income-Related Monthly Adjustment Amount — Life-Changing Event (form SSA-44) within 60 days of the event.

Part D prescription drug plan premiums

Part D premiums are set by insurance companies and vary significantly depending on which plan you choose and which pharmacy you use. Some plans charge no monthly premium at all, while others charge $50, $100, or more per month. The same insurance company may offer multiple Part D plans with different premiums and drug coverage.

You choose your Part D plan during the annual enrollment period (October 15 to December 7 each year). The plan you pick determines not only your monthly premium but also which drugs are covered, how much you pay at the pharmacy, and which pharmacies you can use. A drug that costs $10 in one plan may cost $50 in another, so comparing plans based on the drugs you actually take matters more than comparing premiums alone.

Like Part B, Part D premiums can be higher if your income was above a threshold two years ago. The IRMAA surcharge for Part D is separate from the Part B surcharge and can add $12 to $77 per month depending on your income level.

Medicare Advantage (Part C) premiums

Medicare Advantage plans are offered by private insurance companies and combine Part A and Part B coverage. Some Medicare Advantage plans charge zero monthly premium beyond what you already pay for Part B. Others charge $50 to $200 or more per month.

A zero-premium Medicare Advantage plan does not mean zero cost overall. You still pay your Part B premium, and you typically pay copays when you see a doctor, visit urgent care, or fill a prescription. Some plans have lower copays than others. You also have an annual out-of-pocket maximum — once you reach it, the plan covers most remaining care for the rest of the year.

Medicare Advantage plans are only available during the annual enrollment period (October 15 to December 7). If you switch from Original Medicare to Medicare Advantage, you cannot switch back to Original Medicare until the next enrollment period, so the decision should be based on your actual doctors and medications.

Medigap insurance premiums

Medigap (also called Supplemental Insurance) is a policy you buy from a private insurance company to pay for costs that Original Medicare does not cover — such as copays, coinsurance, and deductibles. Medigap premiums vary by insurance company, your age, your location, and which Medigap plan (A through N) you choose.

A Medigap Plan G might cost $100 to $200 per month depending on your age and where you live, while a Plan N might cost $80 to $150. You can buy Medigap at any time, but the best time is within six months of turning 65 or first enrolling in Part B. During this window, insurance companies cannot deny you or charge more based on your health history. After this window closes, they can charge significantly more or refuse to sell you a policy if you have pre-existing conditions.

You pay your Part B premium to Medicare and your Medigap premium to the insurance company separately. Some people find that the combined cost of Original Medicare plus Medigap is lower than a Medicare Advantage plan, while others find the opposite — it depends on your health needs and local plan options.

When you delay enrollment and pay penalties

If you do not sign up for Part B when you first become may be able to access at age 65, you pay a permanent penalty for as long as you have Medicare. 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 pay an extra 30 percent on top of your regular premium forever.

The same rule applies to Part D. If you go 63 days or more without prescription drug coverage, you pay a penalty of about 1 percent of the national average Part D premium for each month you were without coverage. This penalty also stays with you permanently.

There are exceptions: if you had employer health insurance or were still working when you turned 65, you may not owe a penalty. You must show proof of that coverage when you enroll. If you are unsure whether you owe a penalty, contact Social Security at 1-800-772-1213 to ask.

How to find out what your specific premium will be

To see what you will pay for Part B and Part D, visit Medicare.gov and use the Plan Finder tool. You enter your zip code, the drugs you take, and the doctors you see, and the tool shows you every available plan with its premium, copays, and deductibles side by side.

For Part B, you can call Social Security at 1-800-772-1213 to ask what your premium will be based on your income. Social Security calculates IRMAA and sends you a notice each year showing your premium amount and the income it is based on.

For Medicare Advantage and Medigap, insurance company websites show current premiums, but these change every January. Plans available to you depend on where you live, so you must enter your zip code to see actual options.

Questions to ask your doctor or Medicare counselor

Before you choose a plan, ask your doctor which insurance networks they accept and whether they participate in the Medicare Advantage plans you are considering. Ask your pharmacist which Part D plans cover your current medications and at what cost. If you are considering Medigap, ask whether your doctor accepts patients with Medigap coverage — most do, but it is worth confirming.

If you think your income has changed significantly since Medicare calculated your IRMAA, ask Social Security whether you can request a recalculation. Bring documentation of the change — a job loss letter, retirement date, or divorce decree.

Frequently Asked Questions

Can my Medicare premium change from year to year?

Yes. Part B and Part D premiums are adjusted each January based on inflation and program costs. Your Part B premium may also change if your income changes. Medicare sends you a notice each year showing your new premium amount.

What happens if I cannot afford my Medicare premium?

If your income is very low, you may be able to get help paying Part B and Part D premiums through your state's Medicaid program or through a program called the Medicare Savings Program. Contact your state Medicaid office or call 1-800-Medicare to ask whether you may have access to.

Do I have to pay a premium for Part A?

Most people do not pay a Part A premium because they or their spouse paid Medicare payroll taxes for at least 10 years while working. If you do not have 10 years of work history, you may pay a premium of $278 to $505 per month depending on your work history.

If I am still working at 65, do I have to enroll in Medicare?

You do not have to enroll in Part B or Part D if you have health insurance through your employer and your employer has 20 or more employees. You can delay enrollment without penalty as long as you enroll within eight months of leaving that job or losing that coverage.

What is the difference between what I pay in premiums and what I pay at the doctor?

Your premium is the monthly fee to have coverage. Copays, coinsurance, and deductibles are what you pay when you actually use care. You can have a low premium but high out-of-pocket costs, or vice versa — comparing plans means looking at both.