Medicare premiums are the monthly fees you pay to stay enrolled in each part of Medicare you choose

A premium is the amount you pay every month to have Medicare coverage. Think of it like a subscription fee — you pay it whether you use your benefits that month or not. Most people pay premiums for Part B (doctor visits and outpatient care) and Part D (prescription drugs). If you have Original Medicare, you may also pay a premium for Part A (hospital care), though most people do not because they or their spouse paid Medicare taxes while working.

The amount you pay depends on which parts of Medicare you have, when you signed up, and your income. Part B and Part D premiums change each year on January 1. Part A premiums, if you owe them, also change yearly. The Social Security Administration or your Medicare plan sends you a notice in the fall showing what your premiums will be in the coming year.

You pay premiums by having the amount taken from your Social Security check, your railroad retirement benefit, or your federal employee annuity. If you do not receive one of those payments, you pay Medicare directly by mail or online. Missing a premium payment can end your coverage, though Medicare gives you a grace period to catch up.

Key Takeaways

  • Part B premiums in 2024 are $164.90 per month for most people, but higher earners pay more based on their income from two years ago.
  • Part A has no premium for most people, but those who did not pay enough Medicare taxes while working may pay up to $505 per month in 2024.
  • Part D premiums vary by plan and insurance company, ranging from $0 to over $100 per month depending on which drugs you take.
  • Your premium amount is locked in when you join a plan, but it can change on January 1 each year.
  • 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.

Part B premiums and how income affects what you pay

Part B covers doctor visits, lab tests, X-rays, and outpatient hospital services. Most people pay the standard Part B premium, which is set each year by Medicare. In 2024, the standard premium is $164.90 per month, but this amount changes on January 1 each year based on the cost of providing Part B services.

If your income is above a certain threshold, you pay a higher premium called an Income-Related Monthly Adjustment Amount (IRMAA). Medicare uses your tax return from two years ago to calculate this. For example, in 2024, Medicare looks at your 2022 income. If you were single and earned more than $97,000, or married filing jointly and earned more than $194,000, you pay extra on top of the standard premium. The higher your income, the more you pay — some high earners pay three or four times the standard amount.

If your income changed significantly — you retired, lost a spouse, or had a major life event — you can ask Medicare to recalculate your IRMAA 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). Social Security processes this request, and it can take several weeks.

Part A premiums for those who need to pay

Most people do not pay a Part A premium because they or their spouse paid Medicare taxes for at least 40 quarters (10 years) while working. If you meet this requirement, Part A is free when you turn 65.

If you did not pay enough Medicare taxes, you may have to pay a Part A premium. In 2024, the premium is $505 per month if you have fewer than 30 quarters of Medicare tax history, or $278 per month if you have 30 to 39 quarters. These amounts change each year. You can check your Medicare tax history by creating an account on ssa.gov and viewing your Social Security Statement.

Some people who did not work in the United States can still get free Part A at 65 if they are a U.S. citizen or permanent resident and have lived in the country for at least five years. Others may be able to buy Part A coverage even if they do not meet the work requirement, though this is less common.

Part D premiums and how they vary by plan

Part D covers prescription drugs. Unlike Part B, which has one standard premium for all of Original Medicare, Part D premiums depend on which insurance company's plan you choose. The same insurance company may offer multiple Part D plans, each with a different premium and different list of covered drugs.

Part D premiums in 2024 range from $0 to more than $100 per month, depending on the plan. Some plans have no premium but charge higher copays when you fill prescriptions. Others charge a higher monthly premium but lower copays. You choose the plan that makes the most sense for the drugs you actually take. Medicare's Plan Finder tool on Medicare.gov lets you enter your current medications and see which plans cover them and what you would pay.

Part D premiums can change on January 1 each year, and insurance companies can change which drugs they cover or how much they charge for them. If your plan's premium or coverage changes in a way that no longer works for you, you can switch to a different plan during the Annual Enrollment Period (October 15 to December 7 each year).

Late enrollment penalties and how they work

If you do not sign up for Part B or Part D when you first become may be able to access, Medicare charges you a permanent penalty for as long as you have that coverage. This penalty is added to your regular premium every month for the rest of your life.

For Part B, the penalty is 10% of the standard premium for each full 12 months you delayed. If you delayed for three years, you pay an extra 30% on top of your Part B premium forever. For Part D, the penalty is 1% of the national average Part D premium for each month you delayed. If you delayed for 24 months, you pay an extra 24% on your Part D premium forever.

You can avoid this penalty if you have what Medicare calls creditable coverage — drug coverage from an employer, union, or other source that is at least as good as Part D. If you have creditable coverage, you can delay Part D without penalty. When your creditable coverage ends, you have 63 days to sign up for Part D without owing a penalty. Your employer or plan should send you a notice each year stating whether your coverage is creditable.

How to pay your premiums

Most people have their Part B premium taken directly from their Social Security check. If you receive a Social Security benefit, Railroad Retirement Board benefit, or federal employee annuity, Medicare automatically deducts your premium from that payment each month. You see the deduction on your benefit statement.

If you do not receive one of these payments, you pay Medicare directly. You can pay by mail, by phone at 1-800-MEDICARE, or online through your Medicare account at Medicare.gov. You can also set up automatic payments from your bank account so the premium is withdrawn on the same day each month.

If you miss a premium payment, Medicare gives you a grace period. For Part B and Part A, you have three months to pay before your coverage ends. For Part D, the grace period is also three months. If you do not pay within the grace period, your coverage stops. You can restart it, but you may have to wait until the next Annual Enrollment Period, and you may owe a late enrollment penalty.

What happens if your income changes or you have a life event

If your income drops significantly — you retire, lose a job, or have a major life change — your Part B IRMAA may go down. You do not have to wait until the next year. You can file a form with Social Security explaining the change and asking them to recalculate your premium using your current income.

Life events that may have access to include retirement, loss of income, loss of a spouse, divorce, or a significant drop in income or resources. You must file the form within 60 days of the event. Social Security will review your request and send you a new premium amount if you may have access to for a reduction.

If your income increases, your IRMAA will increase automatically based on your tax return from two years prior. You cannot ask for a reduction based on a future income drop — Medicare uses the income from two years ago, not your current year income.

Frequently Asked Questions

Can I get help paying my Medicare premiums?

Yes. If your income is low, you may may have access to for Medicaid or the Medicare Savings Program, which can pay some or all of your Part A and Part B premiums. Each state runs these programs differently, so contact your state Medicaid office or call 1-800-MEDICARE to find out what is available where you live.

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

Your income from two years ago determines your premium. If your income was higher than theirs, you pay more through IRMAA. Also, if you delayed signing up for Part B, you pay a permanent penalty on top of the standard premium. Your neighbor may have signed up on time and had lower income two years ago.

What if I cannot afford my premiums?

Contact your state Medicaid office or call 1-800-MEDICARE to ask about the Medicare Savings Program or other programs that help pay premiums. If your income recently dropped, file a life-event form with Social Security to ask for a recalculation of your IRMAA. Some community organizations also offer financial counseling for Medicare costs.

Do I have to pay premiums if I have a Medigap or Medicare Advantage plan?

Yes. You still pay your Part B premium to Medicare, and you pay a separate premium to your Medigap or Medicare Advantage insurance company. Medigap and Medicare Advantage premiums vary by plan and company. Medicare Advantage plans often have lower or no premiums but higher copays when you use care.

When do premiums come out of my Social Security check?

Medicare deducts your premium on the same day your Social Security payment arrives, which is usually the third, fourth, or fifth Wednesday of the month depending on your birth date. You can see the deduction on your benefit statement or by logging into your Social Security account at ssa.gov.