Have you ever wondered how much Medicare is going to cost you? Why are there separate parts of Medicare and separate costs of each part of Medicare?
What is the total cost of my Medicare and how do I pay each premium for Medicare?
These questions are important to everyone as they begin their search for the best Medicare insurance plans and how to begin understanding Medicare costs. Many people enrolling into Medicare are also retiring, which means your income may be changing, sometimes substantially, so it is important to know your cost upfront so you can plan for the future. When it comes to paying for Medicare, it can be easy to get the estimate of total cost of Medicare as well as how to pay for each part of Medicare.
It could be quite a surprise, when you turn 65, or come off Employer Group coverage, and realize that not all your Medicare will be free. Understanding the cost of Medicare for Part B, Part D, and any supplemental coverage, along with getting estimates for each part of Medicare can be easy.
Medicare Part A Cost – Hospital Coverage
Part A is the free part of Medicare! Kind of. For most people, the cost of Medicare Part A will be zero. If you’ve worked, or are married/divorced and your spouse worked at least ten plus years while in the United States, your Medicare Part A will be no cost; these costs were paid with your taxes that have come out of your paycheck. So, although Medicare Part A seems free on the surface, you have actually been paying for it most of your life.
If you have to buy this part of Medicare Part A, you will be charged a monthly premium based on the amount of work credits you have earned. In 2025, if you worked between 30-39 quarters, you will pay $285 per month, and if you worked 29 or fewer quarters, you will pay $518 per month. To be considered eligible to buy into Medicare part A, you will have to have been a legal resident or have a green card for at least five years in the United States.
Part A, known as Hospital coverage, will cover your inpatient medically necessary care (excluding doctor charges) after your Part A per benefit period deductible. In 2025, this deductible is going to be $1,676.
If you are hospitalized, in a skilled nursing facility, or hospice care, you will also have a coinsurance for the amount of time you spend in these facilities. While hospitalized, you will have $0 coinsurance for days 1-60, $419 per day for days 61-90, and $838 per day for days 91-150. Anything beyond 150 days you will pay all costs of your hospitalization. If in a skilled nursing facility, you will have a $0 coinsurance for days 1-20, but a $209.50 per day coinsurance for days 21-100.
The cost-share under Medicare Part A (deductible and coinsurances) may increase each year. Many Medicare Supplement plans cover these cost-shares under Medicare Part A.
Medicare Part B Cost – Medical Coverage
If Medicare Part A is free, is Medicare Part B also free?
Unfortunately, most everyone pays a monthly premium for Medicare Centers for Medicare and Medicaid Services. Also known as CMS.
Both Medicare Part A and Part B. The standard Part B, known as Medical coverage, premium amount in 2025 is $185.00 per month. Most people pay the standard amount for Medicare Part B, however if your modified adjusted gross income (MAGI) exceeds a certain amount, you will end up paying more for your Medicare Part B. Your MAGI is determined by your most recent tax return filed with the IRS, typically from two years prior to enrolling. If your MAGI exceeds the standard amount, you will pay what is known as Income Related Monthly Adjustment Amount – IRMAA. IRMAA will be discussed more in depth below.
The premium is not the only cost under Medicare Part B. You are also responsible for certain cost-shares. The first aspect is the Medicare Part B annual deductible, which is $257. Luckily, unlike the Medicare Part A deductible, you will only pay this once per year. Once you have met the Part B annual deductible, you essentially enter an 80/20 split for your Medicare outpatient coverage, with Medicare Part B paying 80%, and you paying 20%. Although 20% really doesn’t sound like a lot, it is important to remember that there is no limit to this 20%. The lack of an out-of-pocket maximum on Medicare cost-sharing is why it is essential to look into additional coverage, such as a Medicare Supplement plan.
Give us a call at 877-88KEITH (53484) we can review the benefits of MediGap plans in your area!
Example of Total Medicare Monthly Cost
To get an idea of how much you’re going to pay every month for your Medicare, you’ll have to understand that it will be based on your income and will vary per individual. It is also going to depend on any coverage that you choose to supplement your Medicare.
Here is an example to help clarify the process. Take into consideration that your additional expenses are going to be out of pocket is going to be minimal, as any supplement plans that you have may pick up the majority of any of your costs that would typically be out of pocket. There are different Medicare plans available for you to choose so that you will have a monthly premium that will work within your budget.
For example, let’s say your Part B premium of $185.00 per month, your Medigap Plan G monthly premium is also $125 per month and you enrolled in a Part D plan, which increases your premium another $7.00 per month. Your total cost is going to be $317.00 every month for your premiums. You will have an annual deductible of $257 under Medicare Part B, but then, that’s it! You will have no other deductibles, copayments or coinsurances for the year on your hospitalization or outpatient procedures! You will know each month what your cost is without any surprises.
How Do I Determine IRMAA
What is IRMAA and what does it have to do with the cost of Medicare?
If you think you may fall into the bracket of a higher-income earner when you are applying for Medicare, it is important to determine if you will pay an Income Related Monthly Adjustment Amount, and exactly what that amount will be.
While this may seem too confusing, you will not have to do all this math for yourself. Social Security reviews your Tax Return information you will be notified by mail if you happen to exceed any of the income limits and if there is a higher amount that you were going to have to pay.
IRMMA is determined by Medicare and based on Income Tax records. These premiums are going to be based on your adjusted household income. To do this, the Social Security office will use your IRS taxes from two years prior. This means they will use your tax returns to figure out what you were going to pay for Parts B and D. Keep in mind that Part D will also be based on your income. If you and your spouse file jointly, Social Security will base all your premiums for each of you based on your total married income, whether you file your tax returns jointly or not. Premiums for any Part B plan is going to be individual and never combined.
Now, as we mentioned before, many people enrolling into Medicare are retiring from work. If you are retiring, it is likely that your income today is not going to be at the same level it was at two years ago, which is the report that Social Security is using. How can we fix this? Luckily, you may Appeal the cost of Medicare Part B, and Part D, cost is if there are changes to your income. There is an appeal form that you can submit to Social Security to request a reassessment of your income level. Typically, Social Security will ask for some documentation, such as a letter of termination, to verify the change in income. It is important to remember that salary is not the only factor that is looked at for your MAGI-
What is considered income when calculating my Medicare Part B costs:
- Wages
- Interest
- Minimum dividends from any of your investments
- Capital gains
- Social Security Benefits
- Tax-deferred Pensions
What won’t be contributed to your premium cost
- Your Roth IRAs and your Roth 401k
- Your life insurance policies
- Reverse mortgages
- Any of your health savings accounts
If your MAGI is above the standard income level, you will pay an increased premium for Medicare Part B and Medicare Part D. These increases work in steps based on your tax bracket:
Tax Filing Status | 2025 MAGI | 2025 Part B Premium Adjustment | 2025 Part D Premium Adjustment |
Single | $106,000 or Less | = $185.00 | – |
$106,000.01 – $133,000 | + $74.00 = $259.00 | + $13.70 | |
$133,000.01 – $167,000 | + $185.00 = $370.00 | + $35.30 | |
$167,000.01 – $200,000 | + $295.90 = $480.90 | + $57.00 | |
$200,000.01 – $499,999 | + $406.90 = $591.90 | + $78.60 | |
More than $500,000 | + $443.90 = $628.90 | + $85.80 | |
Married | $212,000 or Less | = $185.00 | – |
$212,000.01 – $266,000 | + $74.00 = $259.00 | + $13.70 | |
$266,000.01 – $334,000 | + $185.00 = $370.00 | + $35.30 | |
$334,000.01 – $400,000 | + $295.90 = $480.90 | + $57.00 | |
$400,000.01 – $749,999 | + $406.90 = $591.90 | + $78.60 | |
More than $750,000 | + $443.90 = $628.90 | + $85.80 | |