When it comes to Medicare, understanding your costs is key to planning for healthcare expenses. One of the most important factors to consider is Medicare premiums—the monthly payments you’ll need to make to maintain your Medicare coverage. Here’s a breakdown of what you need to know about the different Medicare premiums and how they might affect you.
For most people, Medicare Part A (hospital insurance) is premium-free. This is because during your working years, you likely paid Medicare taxes through your payroll. If you or your spouse have worked for at least 10 years (or 40 quarters) and paid these taxes, you won’t have to pay a premium for Part A.
However, if you haven’t met the required work history, you may need to pay a premium for Part A coverage. In 2024, those who worked fewer than 40 quarters may pay a premium of up to $556 per month, depending on how many quarters they contributed.
Medicare Part B (medical insurance) covers doctor visits, outpatient care, and preventive services. Unlike Part A, almost everyone pays a premium for Part B. In 2024, the standard monthly premium is $174.70, but your actual premium can be higher based on your income.
The Social Security Administration (SSA) uses your modified adjusted gross income (MAGI) from two years ago to determine whether you’re subject to an Income-Related Monthly Adjustment Amount (IRMAA). This means that if your income exceeds certain thresholds, you’ll pay an additional surcharge on top of the standard premium.
Here’s an example of the IRMAA structure for 2024:
Medicare Advantage plans, also known as Medicare Part C, are offered by private insurance companies. These plans bundle together Medicare Parts A, B, and often D (prescription drug coverage). Premiums for Medicare Advantage plans vary depending on the plan and the provider.
In many cases, Medicare Advantage plans may have low or $0 monthly premiums, but keep in mind that you’ll still need to pay your Part B premium alongside any additional costs specific to your Medicare Advantage plan.
Medicare Part D provides coverage for prescription drugs, and like Part C, it is offered through private insurers. The premiums for Part D plans vary depending on the specific plan and its coverage. In 2024, the average monthly premium for a Part D plan is around $50. Your actual premium may differ based on your plan and location.
Similar to Part B, Part D also has an IRMAA surcharge if your income exceeds certain limits. This means higher earners will pay more for their prescription drug coverage.
Medigap, or Medicare Supplement Insurance, helps cover out-of-pocket costs not included in Original Medicare, like copayments, coinsurance, and deductibles. Medigap premiums vary based on factors such as your age, the plan type, and your location. Medigap plans are sold by private insurers, and you pay the monthly premium in addition to your Medicare Part B premium.
Understanding Medicare premiums is crucial to making informed decisions about your healthcare coverage. Be sure to review your income, plan options, and potential penalties to avoid unexpected costs. Whether you choose Original Medicare or a Medicare Advantage plan, knowing your premiums will help you manage your healthcare expenses more effectively.
Contact an independent Medicare Insurance Storefronts agent to learn more about Medicare Premiums.
Getting some assistance can make the Medicare process much smoother. Consider the Medicare information above and work with an Insurance Storefronts Medicare independent agent in your community. This approach streamlines the process, helping you make informed decisions with less hassle.