Table of Contents:

  1. How Much Do Higher-Income Enrollees Pay for Medicare Part B?
  2. Determining Your Income

Original Medicare consists of two parts (A and B). Medicare Part A covers hospital-related expenses, while Medicare Part B covers a range of medically necessary services (such as doctor’s visits, tests, outpatient care, and some specialty care).

While the Original Medicare benefits are available to all Americans aged 65 years and over and other eligible individuals, not everyone will pay the same amount for these benefits. Furthermore, the factors that determine how much you pay for Part A differ significantly from those of Medicare Part B.

Beneficiaries who paid Medicare taxes for more than 10 years usually will not pay monthly premiums for their Part A plans, sometimes called premium-free Part A. Beneficiaries who did not pay toward Medicare before they became eligible or who paid toward Medicare for fewer than 10 years can buy Part A and will pay monthly premiums.

The cost breakdown for Medicare Part B has nothing to do with how much you paid in payroll taxes during your working years. Part B premiums are dependent on your income from the previous year.

How Much Do Higher-Income Enrollees Pay for Medicare Part B?

The majority of Medicare beneficiaries pay the standard $148.50 monthly premium for Medicare Part B because of where they fall on a sliding scale based on yearly income, which is used to determine precisely how much an individual will pay in Part B premiums. If you are married and filing jointly, you and your spouse’s combined income will be used to determine your Part B costs. Keep in mind that premiums for every Medicare plan (including Part B) change annually, so the following cost breakdown only applies for 2021 plans.

Very low-income beneficiaries can apply for Extra Help, which will provide assistance with your Medicare payments. Individuals whose annual income is between $19,140 and $88,000 will pay the standard Part B premium ($148.50/month in 2021). Individuals with incomes exceeding $88,000/year will pay an adjusted premium. For couples, the income threshold is doubled to $176,000.

In 2021, individuals earning between $88,000 and $111,000/year will pay $207.90/month for Part B coverage. Individuals earning between $111,000 and $138,000/year will pay $386.10/month in premiums, individuals earning between $165,000 and $500,000/year will pay $475.20/month, and individuals earning more than $500,000/year will pay a premium of $504.90/month for Part B.

For couples filing jointly, the income thresholds are doubled, with the exception of couples who earn over $750,000/year. These couples will each pay the maximum amount of $504.90/month.

In addition to the monthly premium, all Part B beneficiaries must meet a deductible before their coverage begins. This number has increased from $198 in 2020 to $203 in 2021. The Part B deductible is the same for all beneficiaries regardless of income.

Determining Your Income

Even if you are retired, you likely have a monthly income. Your income consists of your salary, if applicable, but there are also dozens of other transactions that the IRS also treats as income. These include taxable interest, capital gains, money earned through dividends, distributions from your IRA account, pensions, forms of passive income (such as income from rental properties), annuities, alimony, unemployment income, and taxable social security benefits.

Information adapted from the Centers for Medicare and Medicaid Services and Medicare.gov

Additional data and cost information adapted from the U.S. Department of Health and Human Services and the Internal Revenue Service

Who is Eligible for Medicare?, 2020. The U.S. Department of Health and Human Services

Section 5: Explanation of Terms, 2020. The Internal Revenue Service