Premium
The monthly amount a Medicare beneficiary pays for coverage, separate from deductibles and cost-sharing; Part B premiums are income-adjusted under IRMAA for higher earners.
Medicare premiums are monthly fees paid to maintain coverage regardless of whether services are used. Most beneficiaries pay no Part A premium (if they worked 40+ quarters). The standard Part B premium is $174.70/month in 2024. Part D premiums vary by plan ($7–$100+/month). Medigap premiums are additional, ranging from $70–$400/month depending on plan and age.
Income-Related Monthly Adjustment Amounts (IRMAA) increase Part B and Part D premiums for high earners based on modified adjusted gross income (MAGI) from 2 years prior. The 2024 IRMAA tiers start at $103,000 for individuals ($206,000 for married filing jointly); the highest tier (income above $500,000 individual/$750,000 married) adds $419.30/month to the Part B premium and $81.90/month to Part D — a total surcharge of over $6,000/year.
Premiums are typically deducted directly from Social Security benefit checks. Beneficiaries not yet receiving Social Security pay by quarterly billing. Tax planning around IRMAA — Roth conversions, capital gains timing, QCDs from IRAs — can meaningfully reduce premium exposure in retirement.
Real-World Example
After a retiree completed a $200,000 Roth conversion at age 63, the resulting MAGI triggered the highest IRMAA bracket 2 years later at 65, adding $5,045/year to Medicare premiums that would not have applied had the conversion been spread over multiple years.