Medicare Premiums Explained: Why You Might Pay More

Medicare premiums can be confusing, especially when you find out you’re paying more than someone else for the same coverage. The truth is, not everyone pays the same amount for Medicare, and several factors can impact your costs. In this post, we’ll break down why Medicare premiums vary and how you can manage your expenses.

How Medicare Premiums Are Determined

Medicare premiums depend on the type of coverage you have. Here’s how each part is calculated:

Part A (Hospital Insurance)

• Most people don’t pay a premium for Part A if they’ve worked at least 10 years (40 quarters) and paid Medicare taxes. This is known as premium-free Part A.

• If you don’t qualify for premium-free Part A, you could pay up to $560 per month in 2025, depending on your work history.

Part B (Medical Insurance)

• The standard premium for Part B in 2025 is $174.70 per month.

• However, if your modified adjusted gross income (MAGI) is above a certain threshold, you’ll pay an Income-Related Monthly Adjustment Amount (IRMAA), which increases your premium.

Part C (Medicare Advantage) & Part D (Prescription Drug Plans)

• Premiums for Medicare Advantage (Part C) and Prescription Drug Plans (Part D) vary depending on the private insurance company and the specific plan.

• Like Part B, higher-income earners may pay more for Part D due to IRMAA.

  
  

Why You Might Pay More for Medicare Premiums

1. High Income

• If your MAGI is above $103,000 for individuals or $206,000 for joint filers, you’ll pay more for Part B and Part D premiums due to IRMAA.

• The Social Security Administration uses your tax return from two years ago to determine your income level.

2. Late Enrollment Penalties

• If you don’t enroll in Part B or Part D when first eligible and don’t have other credible coverage, you’ll pay a late enrollment penalty:

  • Part B Penalty: 10% for each 12-month period you were eligible but didn’t enroll.

  • Part D Penalty: 1% of the national base premium multiplied by the number of uncovered months.

3. Plan Selection

• Premiums vary widely depending on the Medicare Advantage or Prescription Drug Plan you choose.

• Plans with broader networks, lower copays, or additional benefits (like dental and vision) typically have higher premiums.

  
  

How to Manage Your Medicare Premium Costs

• Review Your Income: If your income has decreased due to retirement, divorce, or another life-changing event, you can request a reassessment of your IRMAA by filing Form SSA-44.

• Compare Plans Annually: Plan premiums and benefits change yearly. Reviewing your coverage during the Medicare Annual Enrollment Period (Oct 15 - Dec 7) can help you find a plan that fits your budget.

• Consider State Assistance Programs: If you have limited income and resources, you may qualify for Medicare Savings Programs or Extra Help to lower your premiums and out-of-pocket costs.

  
  

Need Help Understanding Your Medicare Premiums?

Medicare premiums can be complex, but understanding the reasons behind your costs can help you plan better. At Lindbergh and Associates, we’re here to help you navigate the details and find the most cost-effective plan for your needs.

📞 Contact us today to learn more about your Medicare options and how to lower your premium costs.

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