Costs of Medicare in 2024

Key Points

  • When determining how much does Medicare cost for beneficiaries, remember most people qualify for premium-free Part A if they have worked 40 quarters in the U.S. (10 Full Years) and paid Medicare taxes during that time, but if not, there is a monthly premium.
  • The Part B and D premiums are based on income, so you could pay more for Part B and Part D if you have a higher income. 
  • The standard Medicare Part B premium in 2024 is $174.70.

How much does Medicare cost? Do you have to pay for Medicare? How are Medicare premiums calculated? Who pays for Medicare Part A? Is Medicare Part B free? What will be my Medicare premiums in 2024? These are very common questions about the costs of Medicare. The costs for Medicare Part B and Part D, as well as supplemental coverage, are something that many don’t anticipate. It can surprise you when you turn 65 and enroll in Medicare and learn that Medicare is not free. So, do you have to pay for Medicare? Yes, most people do pay Medicare premiums. Fortunately, it’s fairly easy to put together a Medicare cost estimate so that you can plan ahead.

Overview

How much does Medicare cost? Do you have to pay for Medicare? How are Medicare premiums calculated? Who pays for Medicare Part A? Is Medicare Part B free? What will be my Medicare premiums in 2024?

These are very common questions about the costs of Medicare. The costs for Medicare Part B and Part D, as well as supplemental coverage, are something that many don’t anticipate. It can surprise you when you turn 65 and enroll in Medicare and learn that Medicare is not free.

So, do you have to pay for Medicare? Yes, most people do pay Medicare premiums. Fortunately, it’s fairly easy to put together a Medicare cost estimate so that you can plan ahead.

How Much is Medicare Part A in 2024

The cost for Medicare Part A for most people is usually zero. If you’ve worked 10+ years (40 quarters) in the U.S., you have already paid for Part A via payroll taxes. (99% of beneficiaries qualify for free Part A.)

If you have to buy Part A, the cost for Medicare Part A will be around $505/month. People with less than 40 quarters of work experience but more than 30 quarters can get a pro-rated premium of $278/month.

To be eligible to buy Part A, you must have been a legal resident or have had a green card for at least 5 years.

This part of Medicare covers your hospital stay. But, should you have a hospital stay, what is the Medicare Part A deductible? In 2024, the Part A Deductible will be $1,632. This is an increase of $32 from the Part A deductible in 2023, which was $1,600. (However, if you have a medigap plan it will likely cover this cost for you).

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How Much Does Medicare Part B Cost in 2024

How is Medicare Part B Premium Calculated? The Cost for Medicare Part B is Based on Household Income

Part B is your outpatient medical insurance, but it comes at a cost. Determining what is the premium for Medicare Part B can be tricky as it is based on your modified adjusted household gross income (MAGI). The Social Security office will pull your IRS tax return from two years prior. They use that tax return to determine what you’ll pay for Parts B & D (Part D premiums are also based on income.)

The items that contribute to your modified adjusted gross income include any money earned through wages, interest, dividends from investments, and capital gains. It also includes Social Security benefits and tax-deferred pensions. Distributions from Roth IRAs and Roth 401(k)s, life insurance, reverse mortgages, and health savings accounts do not count in the MAGI calculation.

If you filed jointly with a spouse, Social Security will base your premiums for each of you based on that married income. However, you will EACH pay your own Part B premium. Your premiums for Part B are always individual, not combined. Social Security simply uses your household income to determine where you fall individually in the Part B premiums chart.

Social Security will usually notify you of your next year’s premium annually in December or early January by mail. Fortunately, it is possible to appeal a higher Part B and Part D premium charge.


Medicare Cost for Part D for 2024

How much do you pay for Medicare Part D? Just like Part B, your Medicare costs for Part D vary based on income. Your Medicare Part D Premiums for 2024 also vary by plan. Each state may have 20 or more plans to choose from.

You can find plans that start around $10 – $15/month in most states. Whatever the premium is for your plan, that is known as the base premium for Part D.

You will pay the plan’s published base premium unless you are in a higher income bracket. People with higher incomes pay more for Part D. It’s important to factor this in if you are comparing the potential costs for Medicare Part D against other insurance, such as employer insurance. You also don’t want to forget the cost of prescription drugs as well because you will have copays and coinsurance for most drugs.

If you find yourself in a higher income bracket because your earlier tax returns showed higher income than you now have after retirement, be sure to read our blog post on how to appeal a higher premium. Appealing the higher premium because you have a qualifying life event can help provide Medicare savings in retirement.
You can learn more about Medicare Part D costs on this page.

How Much Will You Pay for Medicare?

Now if you find all that just a little confusing – don’t worry. Medicare premium increases happen almost every year, and our professionals can help you figure out exactly what your Medicare costs will be. Many people find that Medicare and a Medicare supplement cost less than private insurance they had prior to Medicare. Either way, you’ll want to get some estimates of your costs for Original Medicare before you retire. This way, you can plan ahead to have enough savings for the future.
We can help you determine your potential costs right over the phone and provide you with an average cost of Medicare. We can also help you plan for how much are Medicare premiums and your estimated costs in 2024.
Call 843-227-6725 today or complete our online request form below. A friendly licensed insurance agent on our team will assist you.
To continue learning about Medicare, go next to: Apply for Medicare.

Takeaways

  • The standard Part B premium that most people pay is $174.70 in 2024, but you can pay more if you have a higher income.  

  • Many beneficiaries qualify for premium-free Part A. 

  • Your Part D premium is also affected by income.

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