Summary: Medicare premiums are an expense you pay monthly for your Medicare coverage. Medicare premiums will differ from person to person depending on the type of coverage they have. In this article, we’ll cover everything you need to know about Medicare premiums. Estimated Read Time: 10 min
What are Medicare Premiums?
A Medicare premium is a monthly amount that you pay out-of-pocket for your Medicare coverage. Premiums are paid regardless of whether you used your Medicare benefits and will vary depending on your coverage. The federal government sets Original Medicare premiums, while private insurance companies set the premiums for Medicare Advantage plans (Part C), Medicare Part D prescription drug plans, and Medicare Supplement plans (Medigap).
Below, we’ll explain how each part of Medicare handles monthly premiums and the different factors that can impact the cost of your premium.
Medicare Part A Premium 2024
The 2024 Medicare Part A premium is $0 for most people. If you or your spouse worked and paid Medicare taxes for at least ten years, or forty quarters, then you will qualify for premium-free Part A. You will also be eligible for a $0 Medicare Part A premium if you qualify for Medicare under age 65 due to a condition or disability such as ESRD.
You qualify for a $0 Medicare Part A Premium if:
- You (or your spouse) worked and paid Medicare taxes for at least ten years or 40 quarters.
- You qualify to get (or already get) retirement or disability benefits from Social Security or the Railroad Retirement Board
- You qualify for Medicare under 65 due to a disability
What If I Don’t Qualify for Premium-Free Medicare Part A?
If you don’t qualify for the $0 Medicare Part A premium, you may be able to “buy in” to Part A. When you buy Medicare Part A, you will be responsible for paying a monthyl premium of either $278 or $505 each in 2024. The amount is determined by how many years you or your spouse worked and paid Medicare taxes. To buy Medicare Part A, you must also sign up for Medicare Part B.
If you must pay a premium for Medicare Part A, enrolling in Part A as soon as you become eligible is essential. The period when you first become eligible for Medicare is your Initial Enrollment Period; for most people, this period begins three months before your 65th birthday. Signing up for Medicare Part A outside of your Initial Enrollment Period can result in a late enrollment penalty.
The Medicare Part A late enrollment penalty affects how much your Part A premium will be each month. Your Medicare Part A monthly premium may increase by 10%, and you’ll have to pay the penalty for twice the number of years you didn’t sign up. For example, if you waited two years past your Initial Enrollment Period to sign up for Medicare Part A, then you will pay the penalty for four years.
The late enrollment penalty for Medicare Part A is only applicable to those who do not qualify for the $0 Part A premium.
Get Help Paying Your Medicare Part A Premium
Individuals with limited income and resources who must pay a premium for Medicare Part A coverage may be eligible for assistance. The Qualified Medicare Beneficiary Program is a Medicare Savings Program that helps pay for your Medicare Part A premium, Part B premium, deductibles, coinsurance, and copayments.
The Qualified Disabled & Working Individual (QDWI) Program also helps with paying your Medicare Part A premium. This program is for individuals who have a disability, are working, and lost their Social Security disability benefits and premium-free Medicare Part A because they returned to work.
Medicare Savings Programs have income and resource limits you must meet to qualify. These programs are offered through your state’s Medicaid office.
Medicare Part B Premium 2024
The Medicare Part B premium for 2024 is $174.70 each month, compared to $164.90 in 2023. This is the standard premium; however, your premium may be higher depending on your income. This higher premium is known as the Income-Related Monthly Adjustment Amount (IRMAA).
In 2024, you’ll pay a higher premium if your gross income reported on your tax return from 2022 is more than $103,000 if filed individually, or more than $206,000 if you filed a joint return. Depending on your income, your Medicare Part B premium can be as much as $594 a month.
Does the Medicare Part B Premium Change Each Year?
Medicare Part B premiums generally change each year, with most years seeing an increase from the previous year. Occasionally, the Medicare Part B premium will decrease from one year to the next. For example, the standard 2022 Medicare Part B premium was $170.10, but in 2023, it dropped to $164.90.
If you are receiving Social Security benefits, your Medicare Part B premium will be deducted from your Social Security check each month.
There are protections in place to keep your Social Security benefits from decreasing due to an increase in the Medicare Part B premium, called the “hold harmless provision”. If your Social Security cost-of-living adjustment (COLA) is less than the Medicare Part B premium increase, you will see little to no increase in your Part B premium. This ensures you don’t have a reduction in your monthly Social Security checks. This provision does not apply to dually eligible individuals or those who pay an IRMAA premium.
How Does a Late Enrollment Penalty Affect Your Medicare Part B Premium?
Enrolling in Medicare Part B when you first become eligible is important for keeping your premium as low as possible. For most, this means enrolling during your Initial Enrollment Period. However, some people may delay Medicare Part B coverage because they (or their spouse) are working past 65 and still have employer health coverage. If you have creditable coverage, such as employer health insurance, you will qualify for a Special Enrollment Period and will not be penalized.
The Medicare Part B late enrollment penalty is paid in addition to your regular Part B premium. You will pay an extra 10% for each year you qualified for Medicare Part B but didn’t sign up. For example, suppose you waited two years after you became eligible for Medicare Part B to sign up. In that case, you will pay a 20% late enrollment penalty plus the standard monthly premium (or more, depending on IRMAA). This penalty will remain for as long as you have Medicare Part B coverage.
Get Help Paying Your Medicare Part B Premium
Applying for a Medicare Savings Program through your state can help reduce your Medicare Part B monthly premium. You must meet certain criteria to be approved, including income and resource limits. The Qualified Medicare Beneficiary (QMB) Program, Specified Low-Income Medicare Beneficiary (SLMB) Program, and the Qualifying Individual (QI) Program all help pay for your Medicare Part B premium.
When you apply for a Medicare Savings Program through your state’s Medicaid office, your state will determine which program(s) you qualify for. If you need assistance but are unsure if you’ll qualify, you should apply anyway.
Medicare Part C Premium 2024
Medicare Part C premiums vary by carrier and plan and can be as low as $0 a month in some areas. Private insurance providers offer Medicare Advantage Plans (Part C), so costs can vary significantly between plans. Medicare Advantage Plan premiums can change each year; your plan should send notices in the fall to inform you of any cost changes.
When enrolled in a Medicare Part C plan, you will be responsible for paying both your Part C monthly premium and your Medicare Part B monthly premium.
You may qualify for a Special Needs Plan if you are eligible for both Medicare and Medicaid. These plans are a type of Medicare Advantage plan that is curated to meet the needs of specific groups. Though some Special Needs Plans may charge a premium, Medicaid will cover most costs.
Medicare Part D Premium 2024
Medicare Part D premiums vary by plan and can be higher based on income. Like Medicare Part B, your Part D premium will be higher if your income exceeds a certain amount. If your modified adjusted gross income on your 2022 IRS tax form was above $103,000, you will pay an extra fee in addition to your plan’s premium. Depending on your income, you could pay $12.90 - $81.00 extra each month for your Medicare prescription drug plan premium.
Get Help Paying Your Medicare Part D Premium
Extra Help is available to help those who have limited income and resources pay for their Medicare drug plan premium, deductible, coinsurance, and other out-of-pocket costs. If you have full Medicaid coverage or get help paying your Medicare Part B premium from a Medicare Savings Program, you will automatically qualify for Extra Help.
If you qualify for full Extra Help, your Medicare Part D premium will be $0. If you only qualify for partial Extra Help, you will still need to pay a premium, but it will be reduced.
Medicare Part D Late Enrollment Penalty Increases Your Monthly Premium
Failure to sign up for Medicare Part D when you first become eligible without having creditable coverage may result in a late enrollment penalty. Like other late enrollment penalties, the Medicare Part D penalty is added to your monthly premium. You will pay an extra 1% of the national base beneficiary premium for each month you don’t have creditable drug coverage (12% a year).
The national base beneficiary premium for 2024 is $55.00. The national base beneficiary premium changes yearly, so your penalty amount may also change annually. Your Medicare Part D late enrollment penalty remains as long as you have Medicare drug coverage, regardless of whether you switch plans.
If you qualify for Extra Help, you will not be responsible for paying a late enrollment penalty.
Medigap Plan Premiums 2024
Medicare Supplement (Medigap) plan premiums vary between plans and insurance providers. There are three ways in which Medigap policies are priced, and each insurance company can decide which method it wants to use. When shopping for Medigap policies, you’ll want to take into consideration the type of pricing each carrier uses.
The three ways Medigap policies can be priced or “rated” are:
- Community-rated: Regardless of your age, the same monthly premium is generally charged to everyone with the same policy. Premiums may still increase due to factors such as inflation.
- Issue-age-rated: Your Medigap premium is based on the age at which you buy the policy. This means premiums are lower for individuals who buy a policy at a younger age. Once you buy your policy, your premium will not increase as you age. However, it may still increase due to inflation and other factors.
- Attained-age-rated: Your Medigap policy premium is based on your current age. As a result, your premium will increase as you get older. These plans may have the lowest premium when you first sign up, but they could end up being the most expensive.
Below is a sample chart of what monthly Medigap premiums may look like for a 65-year-old man living in Tampa, Florida. The costs below are only samples and can be impacted by various factors.
| Medigap Plan | Sample Monthly Premium |
|---|---|
| Medigap Plan A | $135 – $262 |
| Medigap Plan B | $178 – $263 |
| Medigap Plan C | $198 – $281 |
| Medigap Plan D | $198 – $250 |
| Medigap Plan F* | $198 – $320 |
| Medigap High-Deductible Plan F* | $52 – $118 |
| Medigap Plan G | $181 – $274 |
| Medigap High-Deductible Plan G | $52 – $118 |
| Medigap Plan K | $64 – $151 |
| Medigap Plan L | $124 – $223 |
| Medigap Plan M | $184 – $251 |
| Medigap Plan N | $145 – $207 |
*Medigap Plan F and High-Deductible F are only available to those who became eligible for Medicare before 1/1/2020.
Are Medicare Premiums Tax Deductible?
Medicare premiums are tax deductible if your total deductible medical and dental expenses exceed 7.5% of your adjusted gross income. If you meet this requirement, you must complete a Schedule A (Form 1040) to itemize your deductions.
If your total medical and dental deductions are greater than 7.5% of your adjusted gross income, you can deduct the following:
- Medicare Part A premium (if applicable)
- Medicare Part B premium
- Medicare Advantage (Part C) plan premium
- Medicare Part D plan premium
- Medigap plan premium
*Late enrollment penalties are not tax deductible
In addition to your Medicare premiums, you can also deduct copayments, deductibles, medical equipment, and most dental, hearing, and vision expenses. If you’re unsure whether a medical service is tax deductible, we recommend checking out the complete list of deductible medical and dental expenses from the IRS.
How to Learn More About Medicare Premiums & Other Costs
Medicare premiums can significantly impact monthly budgets, especially for those who are retired or have a limited income. Navigating Medicare expenses can be challenging, and we understand. That’s why we have a team of licensed insurance agents ready to assist you with any questions regarding Medicare. Get your questions together and give us a call at the number above.
Sources
Medicare Costs, Medicare.gov. Accessed August 2023
https://www.medicare.gov/basics/costs/medicare-costs
2023 Medicare Costs, Medicare.gov. Accessed August 2023
https://www.medicare.gov/Pubs/pdf/11579-medicare-costs.pdf
Costs of Medigap Policies, Medicare.gov. Accessed August 2023
https://www.medicare.gov/costs-of-medigap-policies
How the Hold Harmless Provision Protects Your Benefits, Social Security Matters. Accessed August 2023
https://blog.ssa.gov/how-the-hold-harmless-provision-protects-your-benefits/
About Schedule A (Form 1040), Itemized Deductions, IRS. Accessed August 2023
https://www.irs.gov/forms-pubs/about-schedule-a-form-1040
Topic No. 502, Medical and Dental Expenses, IRS. Accessed August 2023
