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How much does Medicare Part B cost?

Q: How much does Medicare Part B cost the insured?

A: In 2021, most people earning no more than $88,000 ($176,000 for a married couple; note that these amounts are higher than they were prior to 2020) pay $148.50/month for Part B. And in most cases, Part B premiums are just deducted from beneficiaries’ Social Security checks.

For 2021, the Part B premium for most enrollees is projected to increase to $158.50/month. And the income thresholds where higher premiums kick in are projected to increase to $91,000 for a single person and $182,000 for a couple.

As described below, the Social Security cost-of-living adjustment can sometimes limit the increase in Part B premiums, but that’s not expected to be the case for 2022, as the COLA is expected to be historically large.

The Part B premium increase from 2020 to 2021 was smaller than initially projected, thanks to a short-term government spending bill that was enacted in the fall of 2020, and that included a provision to cap the increase in the Part B premium for 2021.

Part B premium can be limited by Social Security COLA, but that hasn’t been an issue for most beneficiaries since 2019

In 2021, most enrollees pay $148.50/month for their Part B coverage, which is the standard amount. Most enrollees were also paying the standard amount in 2020  ($144.60/month) and in 2019 ($135.50/month). And the expectation is that virtually all enrollees will be paying the standard premium in 2022, other than those subject to a high-income surcharge (described below).

But that’s in contrast with 2017 and 2018, when most enrollees paid a premium that was lower than the standard premium. The standard premium in 2018 was actually $134/month, but the cost of living adjustment for Social Security wasn’t quite large enough to cover all of the increase from 2017’s premium for most enrollees. That’s why most people paid about $130/month.

The standard Part B premium increased by about $9/month in 2020. But the 1.6% Social Security COLA for 2020 increased the average beneficiary’s Social Security benefit by $24/month. Since the COLA for most beneficiaries exceeded the premium increase for Part B, most Part B enrollees paid the standard premium in 2020. And for 2021, the 1.3% COLA was adequate to cover the increase to the new standard premium ($148.50/month) for virtually all enrollees. The COLA for 2022 is expected to be the largest its been in many years, and more than adequate to cover the projected increase in Part B premiums.

(If the COLA is ever not sufficient to cover the Part B increase, most enrollees — those who receive Social Security retirement benefits and do not have incomes above the high-income threshold — are charged a lower-than-standard premium for Part B. This is to avoid a year-over-year decrease in their net Social Security check after the Part B premium is subtracted each month.)

Higher premiums for enrollees with high-income (threshold indexed in 2020, and annually after that)

Since 2007, people who earn more than $85,000 ($170,000 for a couple) have paid higher Part B premiums (and higher Part D premiums) based on their income.

For the first time, the threshold for what counts as “high income” was adjusted for inflation as of 2020, increasing it to $87,000 for a single individual and $174,000 for a couple. And it increased again for 2021. Harry Sit, of The Finance Buff, explains how the inflation indexing works here.

Indexing the high-income threshold: The math
The indexing is based on the percentage by which the average of the Consumer Price Index for Urban consumers (CPI-U) for the 12-month period ending in the most recent August exceeds the average of the 12-month period that preceded that. So for 2021, we look at how the average CPI-U from September 2019-August 2020 exceeded the average CPI-I from September 2018-August 2019.

On this page, you can pull up the data for CPI-U (select the first box under “Price Indexes”) and manually calculate how the average CPI-U has changed. You’ll add up all the numbers from September 2019 through August 2020 (don’t include the “Half1” and “Half2” numbers), and divide by 12 to get the average (in this case, 257.72). Then you’ll do the same thing for September 2018 through August 2019 (you’ll get an average of 254.016). The difference between those two numbers is 3.705, which represents a 1.46% increase from the 254.016 average CPI-U for September 2018 to August 2019.

So as Sit explains here (for the 2020 increase, but the process is the same for 2021 albeit with different numbers), we increase 87,000 by 1.46% — which results in 88,270 — and then round to the nearest $1,000. That gives us an income threshold of $88,000, which is the lower bound of “high-income” as of 2021.

For people with income above $87,000 ($174,000 for a couple) in 2020, Part B premiums for 2020 ranged from $202.40/month to $491.60/month.

As explained by the math above, the high-income threshold increased to $88,000 for a single individual and $176,000 for a couple in 2021. The 2021 Part B premiums for people with income above those thresholds range from $207.90/month to $504.90/month.

For 2022, Harry Sit projects that the income threshold for IRMAA surcharges will be $91,000 for a single individual and $182,000 for a married couple.

2021 premium surcharge is based on 2019 tax return; you can appeal it if your income has changed

The government determines whether you have to pay an income-related premium surcharge based on your income tax return from two years ago, since that is the most recent tax return they have on file at the start of the plan year. 2019 tax returns were filed in 2020, so those were the most current returns available when income-related premium adjustments were determined for 2021.

But if a life-change event has subsequently reduced your income, there’s an appeals process you can use. In the appeal, you can request that the income-related premium adjustment be changed or eliminated without having to wait for it to reflect on a future tax return.

Part B deductible also increased for 2021, and will increase again in 2022

Medicare B also has a deductible, which increased to $203 in 2021, up from $198 in 2020. For 2022, the Part B deductible is projected to be $217. The Medicare Part B deductible only has to be paid once per year, unlike the Part A deductible, which has to be paid once per benefit period.

After the Part B deductible is met, the enrollee is generally responsible for 20% of the Medicare-approved cost for Part B services for the remainder of the year. But supplemental coverage (from an employer-sponsored plan, Medigap, or Medicaid) often covers these coinsurance charges.

For people who became eligible for Medicare before the start of 2020, there are Medigap plans available (Plans C and F) that cover the Part B deductible, in addition to coinsurance charges. But those plans are no longer available for Medicare beneficiaries who became eligible for Medicare after the end of 2019.


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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Frank
1 year ago

My wife and I started Social Security around November 2019. I retired in 2018 and my wife has not earned an income for some years. We had a high income in 2017, so I received a letter from SS that I have a high premium amount for Medicare B and D that will be deducted from 2020 SS based on our joint income in 2017. However my wife received the same letter with the same amounts. Isn’t this double dipping by SS?? Shouldn’t we be paying one amount for our earned joint income instead of paying 2x for a joint income?

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Josh Schultz
1 year ago
Reply to  Frank

Medicare sends notices to each person about their coverage and premiums. Because it sounds like you’ll each have a higher premium due to income, you’ll both receive notices about your costs.

Please note the government can sometimes adjust income-related Medicare premiums based on life circumstances, such as retiring. If retirement means your current income is lower than in 2017, you may be able to appeal that higher premium. More information can be found here: https://www.hhs.gov/about/agencies/omha/the-appeals-process/part-b-premium-appeals/index.html

Melanie Diamond
1 year ago

I will be 65 next month and I have no income and am single. My age to get social security isnt until 66 and 2 months. So with no income and no social security money until then how do I pay for medicare part B? If I dont sign up for it I get charged penalties! I will not be forced to file early social security with 25% less monthly. How is this legal when the government is who upped my retirement age! I could apply for welfare to help with part B but only if I take early social security now at almost $300 a month less. The government should not force us to take early social security by fining us for not applying when they are the ones who changed our age requirements! !!

Tom Nelson
1 year ago

For Medicare Part B, for a married couple, is the 2020 standard Medicare premium $144.60 for each person or is it for the married couple?

Editor
2 months ago
Reply to  Tom Nelson

The premium for Part B is per person. A married couple would each have to pay the Part B premium if they’re both enrolled in Medicare.

Norma Siller Gonzales
1 year ago

I retired this pass June due to cover -19, my income will be drastically reduced. Will the amount that I pay medicare ($144.60 MONTH) be reduced?

1 year ago

Depending on your new income, you might qualify for one of the Medicare Savings Programs that can cover your Part B premium: https://www.medicareresources.org/faqs/is-there-help-for-me-if-i-cant-afford-medicares-premiums/ You’ll want to contact your state Medicaid office (Medicare Savings Program funding comes from the state’s Medicaid program) to see if you qualify.
You can also reach out to the State Health Insurance Assistance Program in your state: https://www.shiptacenter.org/ These offices provide help and advice for Medicare beneficiaries.

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