Your Medicare Premiums Explained

Why Did My Medicare Premium Increase

Like pretty much every type of health insurance, Medicare premiums usually go up a little every year.

Each year, Medicare premiums may increase slightly, just as they would with other types of health insurance. The Centers for Medicare and Medicaid Services (CMS) announces any premium or other cost increase each year. These expenses may go up because of cost-of-living increases or other circumstances, such as owing the Medicare Income-Related Monthly Adjustment Amount (IRMAA).

To best budget and prepare for estimated Medicare out-of-pocket adjustments each year, you should know how much Medicare Parts A, B, C and D cost, and when you may see income-related increases. Read on to learn more.

How much does Medicare Part A cost?

Most people don't pay a monthly premium for Part A because they paid the required amount of Medicare taxes while working. This is called premium-free Part A. You qualify for premium-free Part A if:

  • You already get retirement benefits from the Social Security Administration (SSA) or the Railroad Retirement Board (RRB)
  • You're eligible to receive SSA or RRB benefits but haven't filed for them yet
  • You or your spouse had Medicare-covered government employment

If you don't qualify for premium-free Part A, you can purchase it. You will pay a premium of:

  • $278 per month if you paid Medicare taxes for 30-39 quarters
  • $506 per month if you paid Medicare taxes less than 30 quarters

In 2023, you'll owe $1,600 per benefit period as your Part A deductible, which is how much you pay out-of-pocket before Medicare begins to pay.

Additionally, you may owe co-insurance for hospital or skilled nursing facility (SNF) stays.

Hospital stays co-insurance per benefit period

  • Days 1-60: $0/day
  • Days 61-90: $400/day
  • Days 91 and beyond: $800/day for each "lifetime reserve day" after day 90 (up to 60 days over your lifetime)
  • Beyond lifetime reserve days: You pay all costs

SNF stays co-insurance per benefit period

  • Days 1-20: $0 co-insurance for each benefit period
  • Days 21-100: $200 co-insurance per day of each benefit period
  • Days 101 and beyond: you pay all costs

How much does Medicare Part B cost?

In 2023, the standard premium for Part B is $164.90. This will be automatically deducted from either your Social Security, RRB, or Office of Personnel Management checks.

If you don't receive any of these payments, you'll get a bill from Medicare.

You owe the standard premium if:

  • You enroll in Part B for the first time in 2023
  • You don't get SSA benefits
  • You're directly billed for your Part B premiums
  • You have Medicare and Medicaid, and Medicaid pays your premiums

If your modified adjusted gross income (MAGI) as reported on your IRS tax return from two years ago is more than a certain amount, you'll have to pay the standard premium plus an Income-Related Monthly Adjustment Amount. This is the amount you pay in addition to your premium if your income is above a certain level.

In 2023, you'll pay $226 for the Part B deductible.

Once you meet this deductible, you'll typically pay 20% co-insurance of the Medicare-approved amount for most doctor services, outpatient therapy and services, and durable medical equipment (DME).

Medicare then pays the remaining 80%.

You may have other co-pays or co-insurance associated with services you receive, such as:

  • 20% co-insurance for outpatient mental health services, including visits to your doctor to diagnose or treat your condition (though additional co-payments or co-insurance may apply if you get your services in a hospital outpatient clinic or department).
  • A percentage of the Medicare-approved amount for each service you get from a doctor for partial hospitalization mental health services (if the doctor accepts assignment). You’ll also pay co-insurance for each day of partial hospitalization services you get in a hospital outpatient setting or community mental health center.

Hospital co-payment for each service you get in a hospital outpatient setting, except for certain preventive services.

What is the Income-Related Monthly Adjustment Amount?

The Medicare Income-Related Monthly Adjustment Amount is the amount you may pay in addition to your premiums. The income that counts toward your IRMAA is the adjusted gross income you reported to the IRS in the previous two years, as well as other forms of tax-exempt income. This is known as your modified adjusted gross income, or MAGI.

IRMAA only applies to Medicare enrollees who have higher incomes. It's determined by the Social Security Administration, based on information provided by the IRS (taken from your income tax return). If the SSA decides you owe the IRMAA, you'll receive a notice in the mail that informs you about:

  • How it was calculated
  • What to do if the information used to calculate it was incorrect
  • What to do if you had a reduction in income or a life changing event that wasn't factored in

Within 20 days of receiving that notification, you'll receive an initial determination notice, which lets you know about when the IRMAA goes into effect and how you can appeal it.

If you choose not to appeal, you don't have to take any additional action. The IRMAA will be automatically added to your Parts B and D premium bills.

You can appeal the decision within 60 days of receiving the determination notice. Qualifying events for appeal include:

  • The data the SSA used to determine the IRMAA was incorrect
  • The SSA used out-of-date data
  • You filed an emended tax return
  • Marriage
  • Divorce
  • Death of a spouse
  • Reduction in work
  • Cessation of work
  • Loss or reduction in specific types of pensions
  • Loss of income from an income-generating property

To appeal the decision, contact the SSA. Typically, you must provide documentation specific to your situation, which could include:

  • Federal income tax returns
  • Marriage certificate
  • Decree of divorce or annulment
  • Death certificate
  • Copies of pay stubs
  • Signed statement from employer indicating reduction of work
  • Statement indicating loss or reduction of pension
  • Statement indicating loss of income-generating property

If your appeal is approved, the SSA will adjust your premiums. If denied, they will let you know how to appeal the denial.

The table below shows IRMAA for Parts B and D at each income level.

Income-Related Monthly Adjustment Amount (IRMAA) 2023

Filing Individual

Filing Jointly

Filing Separate

Part B Premium

Part D Surcharge

$97,000 or less

$194,000 or less

$97,000 or less


Your Plan Premium

$97,000+ $123,000

$194,000+ $246,000

Not Applicable



$123,000+ to $153,000

$246,000+ to $306,000

Not Applicable



$153,000+ to $183,000

$306,000+ to $366,000

Not Applicable



$183,000+ to $500,000

$366,000+ to $750,000

$366,000+ to $403,000



$500,000 and above

$750,000 and above

$403,000 and above



Medicare Part C, better known as 
Medicare Advantage,
is another way to receive your Medicare benefits. These plans are offered by private insurance companies contracted with Medicare. They provide the same coverage you'd get with Original Medicare Part A and Part B, but most offer additional benefits as well. This may include vision, dental, hearing, prescription drug coverage, and more.How much does Medicare Part C cost?

While out-of-pocket costs can vary, premiums average around $20 per month, although they can be significantly higher.

Or, you can you enroll in a $0 monthly premium plan, which includes about 40% of all MA plans. However, low monthly premiums typically mean higher out-of-pocket costs with co-pays, co-insurance, or deductibles, so be sure to compare plans and costs carefully.

Note that there is an out-of-pocket maximum for Part C plans, so you cannot spend more than $8,300 in 2023 on healthcare expenses for in-network services. The max out-of-pocket (MOOP) is $11,300 for out-of-network services.

Also note that some plans may cover your Part B monthly premium, so you wouldn't have to pay that in addition to a Part C premium.

How much does Medicare Part D cost?

Around 90% of Medicare Advantage plans include Part D benefits, but you can also get that coverage through a standalone prescription drug plan. Part D plans vary in cost based on a variety of factors, but in 2023 the average monthly premium for a stand-alone plan was between $20 and $40.

If you have a higher income based on your income tax return, you may have to pay an IRMAA in addition to your plan premium. The table above displays the IRMAA at each income bracket for both Part B and Part D.

In 2023, Part D deductibles cannot be more than $505, and there are plans that offer $0 deductibles.

Part D co-pays and co-insurance costs can also vary depending on which tier your prescription drug falls into. Each tier has different copayments, and the higher the tier (1-5), the more expensive the drug.

The coverage gap phase of Medicare Part D (more commonly known as the donut hole) is when drug manufacturers begin sharing prescription costs with the Part D plan's provider. Your costs while in the donut hole remain the same as in the coverage phase – roughly 25% of the drug's cost.

You enter the coverage gap when you and your plan spend a combined total of $4,660 in 2023. You leave the donut hole and reach the catastrophic coverage phase when your total out-of-pocket spending for covered prescription drugs hits $7,400. Very few people reach the catastrophic coverage phase. If you do, though, you'll only pay a small co-payment for covered prescriptions for the rest of the year.

Need help understanding your Medicare plan options?

If you'd like help understanding your Medicare plan options, one of our licensed insurance agents can help. We're available Monday through Friday from 8 AM until 5 PM.

Additional resources

Eric Ruge
Florida native Eric Ruge lives by one rule: Do the right thing. His goal as a Medicare agent is helping people find the right Medicare coverage for their unique medical needs and budget. He believes everyone deserves the peace of mind they get knowing they made the right decision about their Medicare coverage. When he's not working, Eric enjoys spending time with family and friends, watching Tampa sports, and playing the occasional round of golf.

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