Medicare Costs Overview

How Much Will Medicare Cost YOU?

If the costs associated with Medicare seem confusing, don’t worry. Many people find that Medicare and an additional supplement plan cost less than their private insurance. At Masters of Medicare, we'll help you determine the potential costs over the phone, including any upcoming costs.

Medicare Part A typically does not cost. In the US, most people who have worked over 10 years (equal to 40 quarters of work), have already paid for their Medicare Part A through payroll taxes.

If an individual has to buy Medicare Part A, the cost is around $499 per month. People having worked less than 40 quarters, but more than 30 quarters, receive a pro-rated premium of $274 per month.

*To be eligible for Medicare Part A an individual must be a legal U.S. resident or have had a green card for at least 5 years.

Cost for Medicare Part B is Based on Household Income

• Medicare Part B premium costs are determined based upon modified adjusted household annual gross income (MAGI).
• The Social Security office reviews your IRS tax returns from two consecutive years prior.
• The IRS uses tax return information to determine your payment for Medicare Parts B & D.
• If you filed jointly with your spouse, Social Security bases premiums for each individual based on the joint income.

Medicare Part B Premiums

• How much does Medicare cost at age 65?
• The monthly premium for Medicare is determined annually.
• Contributing factors to your modified adjusted gross income (MAGI) include income earned through wages, interest, dividends from investments, capital gains, and Social Security benefits or tax-deferred pensions.
• Distributions from Roth IRAs and Roth 401(k)s, life insurance, reverse mortgages and health savings accounts do not count in MAGI calculation.
• How is income calculated for married couples?
• Each individual will pay your own Medicare Part B premium. Premiums for Medicare Part B are individual, not combined.
• The Social Security office simply calculates household income to determine where each individual falls in the Medicare Part B premiums chart.
• Social Security mails notification of each year’s premium in the month of December or early January.
  

Medicare Part D premiums are based upon annual income.

• Medicare Part D premiums vary based upon plan selected. Each state has 20 or more plans to choose from.
• Plans range in cost from about $10 – $15 per month in most states.
• The base premium for Medicare Part D is based upon the plan selected.
• Individuals with higher annual incomes pay a higher premium for Medicare Part D.
• This is important when comparing the potential costs for Medicare Part D with other private insurance, or individual employer insurance.