Medicare Premium Calculator

IRMAA (Income-Related Monthly Adjustment Amount) is an additional charge added to your Medicare Part B and Part D premiums if your income exceeds certain thresholds. For 2024, IRMAA applies when your Modified Adjusted Gross Income (MAGI) exceeds $103,000 for single filers or $206,000 for married filing jointly. There are 5 surcharge tiers: Tier 1 adds $69.90/month to Part B, Tier 2 adds $174.60, Tier 3 adds $279.50, Tier 4 adds $384.30, and Tier 5 adds $594.80. The surcharge applies to both Part B and Part D. Importantly, IRMAA is based on your tax return from 2 years prior — so your 2024 IRMAA is based on your 2022 tax return. If your income has decreased due to retirement, job loss, or other life-changing events, you can appeal using Form SSA-44 to have your surcharge reduced or eliminated.

Your Initial Enrollment Period (IEP) is a 7-month window: 3 months before the month you turn 65, the month you turn 65, and 3 months after. If you're still working and have employer coverage, you may be able to delay Part B without penalty by qualifying for a Special Enrollment Period (SEP). If you miss your IEP and don't qualify for an SEP, you'll face late enrollment penalties: Part B penalty is 10% of the standard premium for each full 12-month period you delayed (permanent — it lasts as long as you have Part B), and Part D penalty is 1% of the national base beneficiary premium ($34.70 in 2024) for each month without creditable drug coverage. These penalties make it crucial to understand your enrollment options and deadlines well before turning 65.

Medicare has significant coverage gaps that many retirees don't anticipate. Original Medicare (Parts A and B) does NOT cover: routine dental care (cleanings, fillings, dentures), routine vision care (eye exams, glasses, contact lenses), hearing aids and fitting exams, long-term care (custodial care in nursing homes or assisted living), routine foot care, cosmetic surgery, or most care received outside the United States. Medicare also has deductibles and coinsurance: Part A has a $1,632 deductible per benefit period in 2024, and Part B has a $240 annual deductible plus 20% coinsurance for most services with no annual out-of-pocket maximum. This is why many retirees purchase Medigap (Medicare Supplement) plans or choose Medicare Advantage plans, which often include additional benefits and out-of-pocket maximums. Budgeting for these gaps is essential for accurate retirement healthcare cost planning.

Medicare Advantage (Part C) replaces Original Medicare with a private insurance plan that bundles Parts A, B, and usually D. These plans often include extra benefits like dental, vision, hearing, and fitness programs, and have an annual out-of-pocket maximum (up to $8,850 in-network in 2024). However, you're typically limited to the plan's provider network and may need referrals for specialists. Medigap (Medicare Supplement) works alongside Original Medicare to cover deductibles, coinsurance, and copays. There are 10 standardized plans (A through N), with Plan G being the most comprehensive for those newly eligible. Medigap has higher premiums but lower out-of-pocket costs and no network restrictions — you can see any doctor who accepts Medicare. You cannot have both Medicare Advantage and Medigap simultaneously. The choice depends on your health, budget, preferred doctors, and willingness to manage premiums vs. out-of-pocket costs.

Several strategies can help manage Medicare costs: (1) Manage your MAGI to stay below IRMAA thresholds — consider Roth conversions before 63, use Qualified Charitable Distributions from IRAs after 70½, and time capital gains strategically; (2) Compare Medicare Advantage vs. Medigap annually during Open Enrollment (Oct 15-Dec 7) to find the best value for your health needs; (3) Review your Part D plan annually — drug formularies change, and switching plans can save hundreds; (4) Consider a Health Savings Account (HSA) before enrolling in Medicare — HSA funds can be used tax-free for Medicare premiums; (5) Check if you qualify for Extra Help (Low-Income Subsidy) for Part D if your income is below $21,870 (single) or $29,580 (married); (6) Appeal IRMAA if your income has decreased due to qualifying life-changing events.

Part A (hospital insurance) is premium-free for most people — if you or your spouse paid Medicare taxes for at least 10 years (40 quarters), you pay $0 for Part A. However, Part B (medical insurance) always has a premium: $174.70/month in 2024 for most people, and more if your income triggers IRMAA. Part D (prescription drug coverage) also has a premium averaging about $35/month. Additionally, you'll pay deductibles, coinsurance, and copays for services used. A typical retiree on Original Medicare with a Medigap Plan G and Part D might pay $300-$400/month in premiums alone, plus out-of-pocket costs. Medicare Advantage plans may have $0 premiums but higher cost-sharing when you use services. So while Part A is free, comprehensive Medicare coverage is definitely not free — budgeting $4,000-$8,000+ per year for Medicare costs is a reasonable planning estimate for most retirees.