Healthcare
Premiums for Part B are standard for most retirees. However, if your annual income exceeds the maximum, you’ll be required to pay a surcharge.

Stephanie Faris
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Published August 31st, 2020
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Updated April 24th, 2022
Table of Contents
Key Takeaways
As long as you qualify, Medicare Part A will be free. You will, however, pay for Medicare Part B.
Premiums for Part B are standard for most retirees. However, if your annual income exceeds the maximum, you’ll be required to pay a surcharge.
The amount of your surcharge depends on your annual income amount for the tax year that’s two years prior to the current one.
If you qualify for Medicare, you’ll probably get Medicare Part A for free. This applies no matter how much money you have going into your bank account each month. But Part A only covers a limited portion of your health care like inpatient care in a hospital or skilled nursing facility care.
For routine doctor’s appointments, you’ll need Medicare Part B, which comes with premiums. You’ll need to stay below the Medicare maximum income to avoid seeing your premiums increase. If you plan to keep working once you’re on Medicare, it’s worth knowing what those limits are.
Who will have to pay the extra amount?
When you sign up for Social Security, you’ll also want to sign up for Medicare. As long as you meet the age and work history qualifications, you’ll get Medicare Part A for free. But you’ll also want Part B, which covers your doctor’s visits and other specific medically necessary services. For Part B, you’ll pay monthly premiums. These Medicare payments, based on income, can change from one year to the next. In 2022, as long as your 2020 adjusted gross income was $91,000 or less, or $182,000 or less if you’re married filing jointly, you’ll pay only $170.10 per month.
Once you’ve exceeded that Medicare threshold, the amount you pay depends on your income. If you earn between $91,001 and $114,000, your premium will be $238.10. It goes all the way up to $578.30, which applies to single filers earning $500,000 or more in 2020.
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If you pay Part B premiums, the amount automatically comes out of your Social Security payments each month. If you aren’t receiving Social Security, a bill will arrive in the mail. You can pay this online, through your bank’s bill pay service, or by mailing a check.
Most Medicare recipients will pay the standard premium. However, if Medicare sees that your tax return reported an income that exceeded the limit, your premiums will be adjusted to reflect that. This excess will be reflected as an Income Related Monthly Adjustment Amount (IRMAA), which is a surcharge added on to the standard premium.
What if my income has changed?
If you’re wondering how Medicare is calculated, it’s based on your tax return from two years ago. That means if your income suddenly increases this year, you won’t have to worry about paying extra until a couple of years down the road.
But if you’ve received a bill and wondered why did my Medicare premium go down, it could be that your income decreased with the tax return Medicare is using to calculate your premium.
What happens if you were exceeding the threshold for Medicare, but your circumstances change? You can request a review of your premiums due to a life-changing event. Qualifying events include:
- Marriage, divorce, or death of a spouse
- Loss of work income for you or a spouse
- Property loss due to a disaster
You can request such a review by completing this form or calling 1-800-772-1213 to schedule an interview with your local Social Security office.
Where can I get more information?
“Does income affect Medicare” may not be your only question. If not, the good news is that you can usually track down the information you need online. The best resource is your my Social Security account. This is where you’ll get some answers specific to your own Medicare payments.
To ask about Medicare premiums or any other Social Security- or Medicare-related topic, your local Social Security office can be a great resource. But you can also pick up the phone and call 1-800-772-1213, or 1-800-325-0778 (TTY) if you have difficulty hearing. The SSA answers calls on weekdays from 8 a.m. to 7 p.m., but you can also get information via the automated service after hours.
Final Thoughts
Are Medicare advantage premiums based on income? Yes, but in many cases, you’ll pay the lowest premium. This is the standard premium, and it applies to you unless you earn more than the Medicare cut off income, at which point you’ll pay a surcharge. If you’re still planning your retirement, it’s important to calculate medical insurance premiums into your monthly income, including what you might pay for a Medicare supplement. We recommend working with a Certified Financial Planner® to discuss your options and planning a budget that will help you live comfortably.
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Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a writer for a credit card processing service and has written about finance for numerous marketing firms and entrepreneurs. Her work has appeared on Money Under 30, The Motley Fool, MoneyGeek, E-commerce Insiders, and GoBankingRates.
Share this advice

Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a writer for a credit card processing service and has written about finance for numerous marketing firms and entrepreneurs. Her work has appeared on Money Under 30, The Motley Fool, MoneyGeek, E-commerce Insiders, and GoBankingRates.
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