Medicare is a federal health insurance program that provides coverage for Americans aged 65 and older as well as younger people with disabilities. Nearly 65 million Americans rely on Medicare for their healthcare needs. However, not everyone pays the same amount for Medicare. The premiums and costs you pay for Medicare coverage can vary depending on several factors such as your income, whether you choose Original Medicare or a Medicare Advantage Plan, the specific coverage options you select, and other personal financial circumstances.

Basic Medicare Part B Premiums Vary Based on Income in 2023

Original Medicare is made up of Part A and Part B. Part A covers inpatient hospital stays, skilled nursing facilities, hospice care and more. Most people do not pay a monthly premium for Part A if they paid Medicare taxes while working. Part B covers things like doctor’s visits, outpatient care and preventive services. For 2023, the standard monthly Part B premium amount is $266. However, your premiums may be higher than this standard rate depending on your modified adjusted gross income from your federal tax return from two years prior.

Specifically, if your income is above a certain threshold, you will pay a higher premium for Part B based on your income. The income thresholds and premium amounts change annually. For 2023, individuals with a modified adjusted gross income of $97,000 or more and married couples with an income of $194,000 or more will pay higher Part B premiums on a sliding scale known as the income-related monthly adjustment amount (IRMAA). At the highest income level for individuals ($500,000+), the Part B premium will be $578.30 per month for 2023.

Original Medicare Advantage Plans Can Have Different Premium Rates

Rather than enrolling in Original Medicare, some people choose to enroll in a Medicare Advantage Plan (also known as Part C). These are private insurance plans approved by Medicare that provide Part A and Part B coverage. Medicare Advantage Plans often provide extra benefits such as dental, vision and prescription drug coverage all in one plan. However, Medicare Advantage Plan premiums can vary significantly between plans and by region. Some plans have no monthly plan premium at all while others may charge over $200 per month. Income-related adjustments also apply to Medicare Advantage Plan premiums.

Extra Coverage Options Like Part D & Medigap Also Impact Medicare Cost

If you want prescription drug coverage, you can enroll in a Medicare Part D prescription drug plan. Standalone Part D plan premiums for 2023 range from about $12-161 per month depending on the plan selected. Higher-income beneficiaries will pay an Income Related Monthly Adjustment Amount (IRMAA) for Part D as well. You can also purchase a Medigap policy, also known as Medicare Supplement Insurance, to help cover some of the out-of-pocket costs Original Medicare does not pay for such as coinsurance and deductibles. Medigap Plan premiums vary by policy and location but average around $150-200 per month for Plan G coverage nationally.

Financial Assistance Through Medicare Savings Programs

There are programs that can help pay Medicare premiums and costs based on low income and limited resources. These programs, known collectively as Medicare Savings Programs, include Qualified Medicare Beneficiary (QMB), Specified Low-Income Medicare Beneficiary (SLMB) and Qualifying Individual (QI). Income limits are tied to the federal poverty level and if eligible, these programs may pay some or all of the monthly Part B premium, deductibles and copayments. Those with higher incomes won’t qualify for these premium subsidies.

Late Enrollment in Medicare Part B Can Result in Higher Premiums

If you don’t sign up for Part B and Part D when you’re first eligible, you may have to pay a late enrollment penalty for as long as you have Medicare coverage. This penalty gets added to your monthly premium for as long as you have Part B and Part D. For Part B, the penalty is 10% of the standard Part B premium for each full 12-month period that you could have had Part B but did not enroll. For example, if you wait 36 months to enroll in Part B, your premium penalty will be 30% extra each month for as long as you have Part B. The Part D penalty is calculated differently but follows a similar idea of penalties for late enrollment.

In Summary

While Medicare aims to provide affordable healthcare coverage, not everyone pays the same price. Premiums and costs for Medicare depend on variables like income level, coverage options selected, enrollment timing and eligibility for financial assistance programs. Understanding how Medicare premiums are calculated each year and the potential for adjustments or penalties can help you prepare financially and make the best choices for your individual situation and budget during Medicare enrollment periods. Speaking to your State Health Insurance Assistance Program (SHIP) counselor is also advised when weighing Medicare options and costs.

We’re Here to Help

You do not have to spend hours reading articles on the internet to get answers to your Medicare questions. Give the licensed insurance agents at American Entitlements a Call at (469) 814-0289. You will get the answers you seek in a matter of minutes, with no pressure and no sales pitch. We are truly here to help.


  1. What parts of Medicare are there and what do they cover?
    Medicare has four parts – Part A and Part B are basic Medicare while Part C and Part D are Medicare Advantage and prescription drug plans. Part A helps pay for inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Part B helps pay for doctor’s services, outpatient care, preventive services, and some medical supplies.
  2. Am I eligible for Medicare and if so, when can I get it?
    Most people are eligible for Medicare when they turn 65. You may also be eligible if you receive Social Security Disability benefits for 24 months. To get Medicare, you must be a citizen or permanent resident of the United States. You can sign up for Medicare during your Initial Enrollment Period which includes the 3 months before your 65th birthday, your birthday month, and the 3 months after your birthday month.
  3. What is the monthly premium for Medicare Part B in 2023 and will I have to pay it?
    The standard monthly premium for Medicare Part B in 2023 is $164.90. Most people will be required to pay this premium each month to maintain their Medicare Part B coverage. However, some lower-income individuals may get a premium-free Part B or pay a reduced amount depending on their income from two years prior as reported on their federal income tax return.
  4. How do Medicare Part B premiums for 2023 work and how are they calculated?
    Medicare Part B premiums are based on your income and calculated using your total adjusted gross income from your federal tax return from two years prior. The Centers for Medicare and Medicaid Services will determine your 2023 income-related monthly adjustment amount and whether you’ll pay the standard premium, a higher amount, or get the premium-free Part B depending on your income. Premiums are calculated based on tax-exempt interest income and other factors reported on your tax return.
  5. Do I have to pay higher Medicare Part B premiums if my income has gone up?
    If your income has increased such that it puts you in a higher premium bracket, you may have to pay higher Medicare Part B premiums. The Social Security Administration matches people’s federal tax returns from two years ago to their Medicare premiums for the current year. So if your income has gone up since then in a way that increases your premium bracket, you may see an increase in your Part B premium amount when it is recalculated.
  6. What is the monthly premium for Medicare Part B in 2023?
    The standard monthly premium amount most people will pay for Medicare Part B coverage in 2023 is $164.90. This premium is deducted from one’s Social Security check or paid separately each month to the Centers for Medicare and Medicaid Services in order to maintain Medicare Part B coverage.
  7. I am enrolled in a Medicare Part C plan. Do I still have to pay the Part B premium?
    If you are enrolled in a Medicare Advantage Plan (Part C), you still need to keep your Part B coverage to remain in the Part C plan. Part C plans include Part B benefits. You may have a plan premium for the Part C coverage, and this may replace the standard Part B premium, but you are still required to pay any applicable Part B premium amounts based on your income.
  8. How much does Medicare cost each month in total premiums?
    The total monthly cost of Medicare premiums depends on whether someone has to pay higher premium amounts based on their income. The standard monthly premiums are $170.10 for Part B and plan premiums may apply for Part D prescription drug coverage or Part C Medicare Advantage Plans. Higher income individuals may have to pay an extra amount each month above the standard Part B premium. On average, monthly Medicare premiums plus supplemental coverage premiums cost $464 for beneficiaries.
  9. When will I be automatically enrolled in Medicare Part B?
    If you are receiving Social Security benefits, you will automatically be enrolled in Medicare Part A and Part B during your Initial Enrollment Period surrounding your 65th birthday. This ensures you have coverage without needing to apply separately for Part B. Others who don’t receive Social Security need to proactively apply for Medicare Part B during their Initial Enrollment Period through the Social Security Administration in order to get it.
  10. How can I apply for Medicare if I am not receiving Social Security benefits?
    If you are eligible for Medicare based on your age but are not receiving Social Security benefits, you can apply for Medicare online at, call 1-800-MEDICARE, or visit your local Social Security office. Be sure to apply during your Initial Enrollment Period surrounding your 65th birthday in order to enroll without potentially paying penalties. Applying allows you to get set up with Medicare Part A and Part B coverage.

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