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<h1 class="article-title">Will You Pay a Medicare Surcharge?</h1>

<p class="article-subheading">Medicare is a federal program that provides health insurance to retired individuals, regardless of their medical condition, and certain younger people with disabilities or end-stage renal disease. Medicare has several parts, many of which include a premium cost based on your tax filing status and income. If your income is high, in some cases you may be subject to a premium surcharge called the income-related monthly adjustment amount (IRMAA).</p>

<p class="article-subtitle"><img alt="" src="//www.emeraldhost.net/files/newsletters/WA_25072_Will%20You%20Pay%20a%20Medicare%20Surcharge.jpg"><br>

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What does Medicare cover?</p>

<p>Medicare coverage consists of two main parts: Medicare Part A (hospital insurance) and Medicare Part B (medical insurance). These parts together are known as Original Medicare. A third part, Medicare Part C (Medicare Advantage), covers all Part A and Part B services and may provide additional services. A fourth part, Medicare Part D, offers prescription drug coverage that can help you handle the rising costs of prescriptions.</p>

<p class="article-subtitle">What does Medicare cost?</p>

<p>Most people age 65 or older who are citizens or permanent residents of the United States are eligible for Medicare Part A without paying a monthly premium. Although Medicare Part B is optional, most people sign up for it. If you want to join a Medicare Advantage plan, you’ll need to enroll in both Parts A and B. And Medicare Part B is never free — you’ll pay a monthly premium for it, even if you are eligible for premium-free Medicare Part A. If you delay starting Part B or Part D after age 65, you may also be subject to a surcharge unless you continue to work and are covered by a workplace health plan.</p>

<p>The standard Part B premium is $185.00 in 2025. However, premiums for Part B and Part D can vary based on income levels. If your modified adjusted gross income (MAGI) as reported on your federal income tax return from two years ago is above a certain amount, you’ll pay the standard premium plus the IRMAA surcharge. You’ll receive a notice from the Social Security Administration if you’re subject to IRMAA.</p>

<hr><p class="article-subtitle">The table shows what you’ll pay per month in 2025 based on your tax-filing status and income:<br>

&nbsp;</p>

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<td data-darkreader-inline-bgcolor="" style="--darkreader-inline-bgcolor:var(--darkreader-background-000066, #00003b); background-color:#000066"><p style="text-align:center"><br>

<span data-darkreader-inline-color="" style="--darkreader-inline-color:var(--darkreader-text-ffffff, #ffffff); color:#ffffff"><strong>MAGI for single filers</strong></span></p></td>

<td data-darkreader-inline-bgcolor="" style="--darkreader-inline-bgcolor:var(--darkreader-background-000066, #00003b); background-color:#000066"><p style="text-align:center"><br>

<span data-darkreader-inline-color="" style="--darkreader-inline-color:var(--darkreader-text-ffffff, #ffffff); color:#ffffff"><strong>MAGI for joint filers</strong></span></p></td>

<td data-darkreader-inline-bgcolor="" style="--darkreader-inline-bgcolor:var(--darkreader-background-000066, #00003b); background-color:#000066"><p style="text-align:center"><br>

<span data-darkreader-inline-color="" style="--darkreader-inline-color:var(--darkreader-text-ffffff, #ffffff); color:#ffffff"><strong>Part B premium</strong></span></p></td>

<td data-darkreader-inline-bgcolor="" style="--darkreader-inline-bgcolor:var(--darkreader-background-000066, #00003b); background-color:#000066; height:25px"><p style="text-align:center"><br>

<span data-darkreader-inline-color="" style="--darkreader-inline-color:var(--darkreader-text-ffffff, #ffffff); color:#ffffff"><strong>Part D premium</strong></span></p></td>

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<td>&nbsp;</td>

<td style="height:5px">&nbsp;</td>

<td style="height:5px">&nbsp;</td>

<td>&nbsp;</td>

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<td><p style="text-align:center">$106,000 or less</p></td>

<td><p style="text-align:center">$212,000 or less</p></td>

<td><p style="text-align:center">$185.00</p></td>

<td><p style="text-align:center">Your plan premium</p></td>

</tr>

<tr>

<td><p style="text-align:center">$106,001–$133,000</p></td>

<td><p style="text-align:center">$212,001–$266,000</p></td>

<td><p style="text-align:center">$259.00</p></td>

<td><p style="text-align:center">$13.70 + plan premium</p></td>

</tr>

<tr>

<td><p style="text-align:center">$133,001–$167,000</p></td>

<td><p style="text-align:center">$266,001–$334,000</p></td>

<td><p style="text-align:center">$370.00</p></td>

<td><p style="text-align:center">$35.30 + plan premium</p></td>

</tr>

<tr>

<td><p style="text-align:center">$167,001–$200,000</p></td>

<td><p style="text-align:center">$334,001–$400,000</p></td>

<td><p style="text-align:center">$480.90</p></td>

<td><p style="text-align:center">$57.00 + plan premium</p></td>

</tr>

<tr>

<td><p style="text-align:center">$200,001–$499,999</p></td>

<td><p style="text-align:center">$400,001–$749,999</p></td>

<td><p style="text-align:center">$591.90</p></td>

<td><p style="text-align:center">$78.60 + plan premium</p></td>

</tr>

<tr>

<td><p style="text-align:center">$500,000 or above</p></td>

<td><p style="text-align:center">$750,000 or above</p></td>

<td><p style="text-align:center">$628.90</p></td>

<td><p style="text-align:center">$85.80 + plan premium</p></td>

</tr>

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</table>

<p><span style="font-size:10px">Premiums for 2025 are based on MAGI for the 2023 tax year.<br>

Source: Centers for Medicare &amp; Medicaid Services, 2024</span></p>

<hr><p class="article-subtitle">What can you do to lower your income?</p>

<p>Most people may see a decline in their income once they retire. However, high-income Medicare recipients may want to lower their income to help reduce the potential premium surcharges. Here are some ideas:</p>

<ul><li><span style="font-size:16px">Put off transactions that could increase income, such as the sale of real estate or stocks.</span></li><li><span style="font-size:16px">Defer distributions from tax-qualified accounts, such as IRAs and 401(k)s, as long as possible.</span></li><li><span style="font-size:16px">Rethink the timing of converting IRA funds to a Roth IRA to avoid increased taxable income.</span></li>

</ul>

<p>Since your income is based on information from two years ago, it may subsequently change, or you may experience a life-changing event (as defined by the SSA) that causes a reduction in your income. Report income changes to the SSA as soon as possible. You’ll need to provide documentation verifying the event and your reduction in income. Visit <a href="http://ssa.gov/benefits" target="_top"><em><strong>ssa.gov/benefits</strong></em></a> for more information.</p>

<p class="article-subtitle">Get help</p>

<p>Navigating Medicare programs and their costs can be tricky. You might consider consulting with an appropriately qualified professional for help.</p>

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