There are many different Medicare parts and plans available to America’s senior citizens. Each Medicare part and plan comes with a different premium. A Medicare premium is the amount you pay for your health insurance each month and various factors help determine your monthly Medicare costs. Here are just five things to know about Medicare premiums.

1. Medicare Part A

If you worked for ten years (40 quarters) in the United States and paid payroll taxes, you are eligible for $0 premium Part A. Yes, you read that right. The FICA taxes you paid throughout your working years went towards your Part A premium. However, without a qualifying work history, you will have to pay a Part A premium.

If you have more than 30 quarters of work experience, but do not have the full 40 quarters, you can get a pro-rated Part A premium for $259 a month in 2021. However, if you have less than 30 quarters, the Part A premium in 2021 is around $471 a month. But don’t let this alarm you. If you have a spouse the qualifying work history, you can get premium-free Part A through them.

2. Medicare Part B

Unlike Part A, your FICA taxes did not go towards the Part B premium. The Part B premium is based on your modified adjusted household gross income (MAGI). Social Security will look at your IRS tax returns from two years prior and will determine your Part B premium based on the information they find. For example, if you are applying for Medicare in 2020, then Social Security will look at your 2018 tax returns.

If you and your spouse file your taxes jointly, Social Security will determine your Part B premiums based on your combined income. However, keep in mind that you both will have individual Part B premiums — the premiums will not be combined. The standard Part B premium in 2021 is $148.50 a month. However, if you earned a higher income two years prior, you may be subject to the Income-Related Monthly Adjustment Amount or IRMAA.

Social Security will deduct your Part B premiums monthly from your Social Security check. If you are not receiving Social Security benefits yet, then they will bill you quarterly.

3. Medicare Part D

Similar to Part B, the Part D premium is also based on your modified adjusted gross income. However, since private insurance companies sell part D plans, the premium will vary by plan. With that said, the national Part D average premium is about $41 a month, but you can find plans for around $10-$15 per month in most states.

Like Part B, if you fall in the high-income bracket, you may be subject to a higher Part D premium. Luckily, you can shop rates each year for Part D plans during the Annual Election Period.

4. Medicare Supplement

A Medicare Supplement, also known as a Medigap plan, is sold by private insurance companies and is 100% optional. The premium for the ten Medigap plans is based upon multiple factors, such as your gender, age, zip code, and tobacco use. It’s not possible to tell you precisely what your Medigap premium will be until you apply. However, when you buy a Medigap plan, you will still be responsible for the monthly Part B and Part D premium.

Medigap plan premiums can increase each year for multiple reasons, such as inflation. The only way to lower your Medigap premium is by shopping rates each year to see if you can find savings through a different plan or carrier. However, you may be subject to underwriting when you apply for a Medigap plan outside your Medigap Open Enrollment. If you do not pass underwriting, you will either be denied a new Medigap plan or receive a higher premium due to pre-existing health conditions.

5. Medicare Advantage

Like Medigap plans, Medicare Advantage plans are also sold by private insurance companies and are optional. Medicare Advantage plans come with a monthly premium, and you must still pay the Part B premium.

You can opt to enroll in a Medicare Advantage plan with a Part D plan built-in, so your Medicare Advantage and Part D premium will be combined. Many Medicare Advantage plans have a $0 monthly premium. However, $0-premium plans may have higher cost-sharing when you visit the doctor, so be sure to read the plan details so you know what to expect.

If you have a Medicare Advantage plan, you should receive an Annual Notice of Change letter in the mail sometime in September. The Annual Notice of Change will notify you of all the changes made to your plan for the upcoming year, such as a premium increase. The Annual Election Period lasts from October 15 to December 7 each year, and during this time, you can shop rates for Medicare Advantage, and Part D plans to ensure you have a plan that meets your healthcare needs and budget.


Each Medicare part and plan has a different premium, so it is good to do your research before you buy. If you had a Health Savings Account (HSA.) with your previous employer, you could use those funds for your monthly premiums. For more information on Medicare premiums, visit or contact a trusted Medicare broker.