When you work in the United States and pay payroll taxes, you may notice a payment for “Medicare” is taken out of each check. Due to this, many seniors near Medicare eligibility believe they don’t have to pay a dime for Medicare since they paid into it throughout their careers.

Unfortunately, Medicare is not free and does come with costs. Medicare’s costs come in the form of premiums, deductibles, and coinsurance. So, you might be wondering, “How much does Medicare cost?” Let’s discuss this below.

Medicare Part A

Most Medicare beneficiaries pay $0 for Medicare Part A. The money that was deducted from your Medicare payroll taxes has funded your Medicare Part A premium. If you or your spouse have worked 40 quarters (ten years) in the United States and paid payroll taxes, then you qualify for premium-free Part A.

If you have not worked the entire 40 quarters but have between 30 to 39 quarters, you will pay a premium of $259 per month for Medicare Part A in 2021. If you have less than 30 quarters, your monthly Part A premium in 2021 would be $471. In order to purchase Medicare Part A, you must be an American legal resident or have been a green card holder for at least five years.

Every year, the Centers for Medicare and Medicaid Services (CMS) establishes the Part A deductible. In 2021, the Part A deductible is $1,484 per 60-day benefit period. When you pay the Part A deductible, Medicare covers your inpatient stay in total for 60 days.

If you are an inpatient for more than 60 days, you will pay a daily copayment of $371 for days 61 through 90 and a $742 daily copay for days 91 through 150. After day 150, you will be responsible for your inpatient stay in full.

Medicare Part B

You will pay the Medicare Part B premium regardless if you worked 40 quarters or not. In 2021, the standard Part B premium is $148.50. However, if you are in a high-income bracket, you will pay more for Medicare Part B and Part D.

When determining your Medicare Part B premium, the Social Security office will look at your IRS tax returns from two years prior. Social Security will base your Part B premium upon your modified adjusted household gross income (MAGI). In 2021, if your individual income is $88,000 or less, or if your joint tax return was $176,000 or less, then you will pay the standard Part B premium.

If your income exceeds those limits, expect to pay the standard Part B premium, plus an Income Related Monthly Adjusted Amount (IRMAA). IRMAA is the additional payment you will be responsible for on top of your monthly Part B premium. Take note that if you no longer make the same income from two years prior, you can file an IRMAA appeal.

On top of your Part B premium, you will also have an annual Part B deductible. The Part B deductible in 2021 is $203. When you receive Medicare-approved outpatient services, you will first pay the Part B deductible before Medicare starts to pay its share. Once you meet the Part B deductible, Medicare Part B will begin to pay 80% of your Medicare-approved services, making you responsible for the remaining 20% coinsurance.

Medicare Part D

As mentioned above, the Social Security office will pull your IRS tax returns from two years before to determine your monthly Part D premium. Since private insurance carriers sell Part D plans, there is no set Part D premium like there is for Medicare Part A and Part B. The private insurance carrier you buy your Part D plan from will establish your premium and your plan’s cost-sharing amount.

If you research Part D plans in your area, you will find plans that range from $7 to $70+ per month. But remember, if you are in a high-income bracket, you will pay an IRMAA charge on top of your Part D premium.

When selecting a Part D plan, you will want to ensure you enroll in a plan you can afford, and the plan has your medications listed on the Part D drug formulary.

How to pay for Medicare

If you enroll in Medicare and are not taking Social Security benefits, you have three different ways you can pay your Part A and Part B premiums. You can pay your Medicare premiums either through Mymedicare.gov, Medicare Easy Pay, or your bank’s bill payment service. Once you start to receive Social Security benefits, your Part A and Part B premiums will be deducted from your Social Security check.

The carrier you purchase your Part D plan from might give you a few options on how you can pay your Part D premium. If you are taking Social Security benefits, you can request your premiums to be deducted from your Social Security check.


You likely have heard many myths about Medicare being free, but you now know Medicare Part A, Part B, and Part D come with some costs. When you begin to enroll in Medicare, consider your next step, such as purchasing a Medigap or Medicare Advantage plan for cost-sharing help. If you aren’t sure which plan is the right one for you, reach out to a creditable Medicare broker who speaks Medicare and request them to help you throughout your Medicare transition.