I’ve been reading information online about the cost of Medicare, but the numbers seem to be all over the place! Do you have a decent estimate on how much Medicare should cost me? Thanks for your help and information on your blogs!
Thanks for your question – this seems to be one of the sticking points when you research Medicare options. The fact is, the amount you spend each month depends on the type of coverage you decide to sign-up for, along with some other details. Here’s a summary so you can estimate the cost of Medicare Insurance.
What Are “Normal” Monthly Premiums for Medicare?
As of now, here are the costs for the premiums for Medicare Parts A ($0), Part B ($164.90, 2023), Part C ($0-100+), and Part D ($8-$60). Again, that’s for most people; however, there are exceptions to these numbers; if you make (or have) a lot of money, you pay more. And if you do not have a lot of money, you pay less or nothing at all.
Figuring Out Your Monthly Medicare Costs with IRMAA
The official name is Income-Related Monthly Adjustment Amount or IRMAA, and it’s pronounced like someone’s name, “Irma.” Boy, oh boy, people do not like IRMAA. She pops up later in Medicare Part D, too.
Medicare looks back at your tax returns from two years ago to determine how much you made. I’ve covered IRMAA in a lot of other posts, so make sure to use the search function on Matt’s Blog for more. They use something called Modified Adjusted Gross Income (MAGI), which is your Adjusted Gross Income with some of your deductions added back in.
If you make a lot of money, you will pay a higher premium for Part B. If you make over $500,000 per year, you could pay over $500,00 per month!
You can figure out your Medicare Part B premium costs by going to the website PrepareforMedicare.com/links and looking for Part B costs in the links section. They change every year, and the table is updated annually. Medicare usually publishes the 2023 Part B premium levels in October or November of the prior year, but this year (2022) they were early and released the 2023 Medicare Part A and B costs in late September.
Most people pay the standard Part B premium amount. If your modified adjusted gross income as reported on your IRS tax return from two years ago is above a certain amount, you’ll pay the standard premium amount and an IRMAA on top.
Your Medicare Part B premium is typically automatically deducted from your Social Security, Railroad Retirement Board, or Office of Personnel Management benefits. If you don’t have enough money to pay this out of any of those, then Medicare will bill you directly for the unpaid balance. If you’re not drawing Social Security, you’ll be billed quarterly.
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Author Bio Matt Feret is the author of the Prepare for Social Security -The Insider’s Guide and the Prepare for Medicare – The Insider’s Guide book series and launched PrepareforSocialSecurity.com to help people get objective answers to questions about Social Security and Medicare. Matt is also the host of The Matt Feret Show. He has held leadership roles at numerous Fortune 500 Medicare health insurers in sales, marketing, operations, product development, and strategy for over two decades.