What Does Medicare Cost?
Part B Medicare
Part A of Medicare has no charge as long as you or a spouse have worked 40 quarters (ten years) and paid into Medicare through payroll taxes. Otherwise there will be a charge for Part A. The standard Part B premium amount in 2023 is $164.90 or higher depending on your income. See IRMAA section below.
Because you must pay a premium for Part B coverage you can turn it down. However, if you decide to enroll in Part B later on you may have to pay a late enrollment penalty for as long as you have Part B coverage. Your monthly premium will go up 10 percent for each 12-month period you were eligible for Part B but didn’t sign up for it, unless you qualify for a “Special Enrollment Period”. See Employer Group Plan link for more information about leaving employer coverage.
Part D Medicare
You do not pay for Part D of Medicare unless you are means tested. See IRMAA section below. This does NOT provide you drug coverage. It is only enrollment in “PART” D of Medicare.
Depending on whether you choose a Medicare Advantage plan or Medicare Supplement plan will determine if you will pay premium for a drug plan. Most Medicare Advantage Plans have the drug coverage built in. See the Medicare Drug Plans link for more information.
Income Related Medicare Adjustment Amount (IRMAA)
High-income Medicare beneficiaries pay extra for their Part B and Part D. This is known as a surcharge. The premium adjustment is based on income tax returns from two years prior. For example, 2021 tax returns are used to determine whether you pay the surcharges in 2023. You can file a re-determination request if you’ve had a life-changing event that has subsequently reduced your income, like retirement.