Monthly premiums vary depending on the plan you sign up for. The amount may change each year. You may also have to pay an additional amount each month depending on your income. What is a premium, deductible, coinsurance or copay? Am I eligible for premium-free Part A? Who pays a higher Part B premium because of their income? Who pays a higher Part D premium because of their income? It varies depending on the Medigap policy you purchase, where you live and other factors.
If you're a higher-income beneficiary with Medicare prescription drug coverage, you'll pay your monthly premiums plus an additional amount. This amount is based on what you report to the IRS. Because individual plan premiums vary, the law specifies that the amount is determined using a base premium. We link the additional amount you pay to the beneficiary's base premium, not to the amount of your own premium.
If you're a higher-income beneficiary, we deduct this amount from your monthly Social Security payments, regardless of how you usually pay your monthly premiums for your prescription drug plan. If the amount is more than your monthly Social Security payment, or if you don't receive monthly payments, you'll receive a separate bill from another federal agency. This agency can be the Centers for Medicare and Medicaid Services or the Railroad Retirement Board. All Medicare bills are due on the 25th of the month. In most cases, your premium is due the same month you receive the bill.
Medicare plan premiums vary from year to year. However, the factors the government uses to calculate your monthly premium depend on what part you have. If you receive benefits from Social Security or the Railroad Retirement Board, your Medicare Part B premium will be deducted from your benefit payment. The Part A hospital deductible covers the beneficiaries' portion of costs for the first 60 days of inpatient care covered by Medicare during a benefit period. Medicare Part A covers inpatient hospitals, skilled nursing facilities, hospices, inpatient rehabilitation, and some home health care services.
While both are health insurance programs administered by the Centers for Medicare and Medicaid Services (CMS), Medicaid is for people with limited income and resources. On November 14, 2025, the Centers for Medicare and Medicaid Services (CMS) released the premiums, deductibles and coinsurance amounts for 2026 for Medicare Part A and B programs and the monthly adjustment amounts for Medicare Part D for 2026 related to income. Understanding Medicare premium calculations can help you better plan your healthcare finances, which is vital for older people with fixed incomes. Once the deductible is paid, Medicare pays most (usually 80%) of the approved cost of care for Part B services, while you pay the remaining cost (usually 20%) for services such as doctor visits, outpatient therapy, and durable medical equipment.
Most Medicare beneficiaries (99%) don't owe a monthly premium for Medicare Part A because they (or their spouse) paid it while working for a minimum of about 10 years.
