In 2021, the standard monthly Medicare Part B premium was $148.50, with a $203 annual deductible. Most beneficiaries paid this amount, though higher earners paid more based on income, and some Part A premiums reached up to $471 monthly for those not qualifying for premium-free coverage.
In November 2021, CMS announced the monthly Medicare Part B premium would rise from $148.50 in 2021 to $170.10 in 2022, a 14.5% ($21.60) increase.
The Medicare Income-Related Monthly Adjustment Amount (IRMAA) is the additional amount an individual must pay on top of their Medicare Part B and/or Part D premium to have coverage if the income reported two years ago was above $88,000 per year for individuals or $176,000 for couples.
For 2025 Medicare premiums, the income used is your Modified Adjusted Gross Income (MAGI) from your 2023 tax return, two years prior, with higher incomes leading to increased Income-Related Monthly Adjustment Amounts (IRMAA) for Parts B and D. MAGI includes your AGI plus tax-exempt interest and other non-taxable income, determining if you pay higher costs based on specific income brackets set by Medicare.
Your CalPERS health coverage will automatically be canceled the first day of the month after you turn 65. Review Cancellation of CalPERS Health Coverage for information on reinstating your health coverage.
Yes, Medicare costs are increasing in 2025 and even more significantly for 2026, with higher monthly premiums for Part B and higher deductibles for both Part A (hospital) and Part B, while Part D (prescription drugs) introduces a major $2,000 out-of-pocket spending cap in 2025, even as its deductible rises. These increases reflect rising healthcare costs, with Part B's standard premium jumping to $202.90 in 2026, eating into the Social Security COLA for many seniors, according to Centers for Medicare & Medicaid Services and USA Today.
2.35% Medicare tax (regular 1.45% Medicare tax + 0.9% additional Medicare tax) on all wages in excess of $200,000 ($250,000 for joint returns; $125,000 for married taxpayers filing a separate return). (Code Sec. 3101(b)(2))
There's no maximum income for Medicare eligibility, but higher incomes mean higher monthly premiums for Medicare Parts B (medical) and D (prescription drugs) through Income-Related Monthly Adjustment Amounts (IRMAA), with thresholds adjusted annually for inflation, like the 2026 brackets starting at $109,000 for individuals and $218,000 for joint filers. Conversely, very low-income beneficiaries might qualify for assistance through Medicare Savings Programs (MSP) to help pay costs.
If you don't buy Part A when you're first eligible for Medicare (usually when you turn 65), you might pay a penalty. Most people pay the standard Part B monthly premium amount ($202.90 in 2026). Social Security will tell you the exact amount you'll pay for Part B in 2026.
If you don't get premium-free Part A, you pay up to $437 each month. The standard Part B premium amount in 2019 is $135.50 or higher depending on your income. However, most people who get Social Security benefits pay less than this amount ($130 on average).
Medicare Part B Premiums/Deductibles
The standard monthly premium for Medicare Part B enrollees will be $148.50 for 2021, an increase of $3.90 from $144.60 in 2020. The annual deductible for all Medicare Part B beneficiaries is $203 in 2021, an increase of $5 from the annual deductible of $198 in 2020.
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In 2026, Medicare brings higher costs for Parts A & B (premiums, deductibles), but also significant prescription drug savings, including a new $2,100 Part D out-of-pocket cap, continued $35 insulin cap, and new negotiated drug prices; plus, enhanced preventive care (like mental health/heart screenings) and stricter Medicare Advantage rules are coming, driven by the Inflation Reduction Act.
If you can't afford your Medicare premium, you likely qualify for financial help through Medicare Savings Programs (MSPs) or Extra Help, which cover premiums, deductibles, and drug costs for those with limited income and assets; start by visiting BenefitsCheckup.org or calling your State Health Insurance Assistance Program (SHIP) for personalized assistance. You can also get help from Medicaid or contact your State Medical Assistance office.
Medigap Premium Increases
Attained-Age plans typically experience premium increases as the policyholder gets older, while Issue-Age plans may experience premium increases due to inflation and other factors. Community-Rated plans may also experience premium increases due to inflation, but not due to age.
Each fall, when we ask the IRS for information to determine next year's premiums, we ask for tax information to verify your reports of changes affecting your income-related monthly adjustment amounts, if any. We also ask the IRS for your two-year-old MAGI if we've temporarily used three-year-old MAGI.
For 2025, the standard Medicare Part B premium for seniors is $174.70 per month, with higher-income individuals paying more (IRMAA), and most people pay $0 for Part A if they qualify; Part D premiums vary by plan but averaged around $40, with high earners paying surcharges. These costs reflect increases from 2024, with Part B rising by $10.30 and Part A premiums for those who buy it increasing to $285 or $518, depending on work history.
Medicare and Medicaid have different rules regarding Social Security income: Medicare does not count Social Security benefits as income for premium calculations. However, Medicare Savings Programs (MSPs) and Medicaid eligibility consider Social Security as part of total income.