Medicare Premiums: What You Actually Pay

When you're planning for retirement, understanding your healthcare costs is critical. Medicare isn't free, and the premiums you pay depend on the path you choose and your income level. We believe in straight answers, no surprises. Let's break down exactly what you can expect to pay for Medicare.

First, you need to understand the two paths of Medicare. The real choice isn't between a Medicare Supplement (Medigap) and Medicare Advantage. The real choice is between Traditional Medicare (Parts A and B) and Medicare Advantage (Part C). Your premiums will look very different depending on which path you take.

Part A Premiums

For most Americans, Medicare Part A (hospital insurance) has a $0 premium. If you or your spouse worked and paid Medicare taxes for at least 10 years (40 quarters), you get Part A premium-free. If you didn't work long enough, you can buy Part A, but the premium can be substantial [as of 2026, varies by location and age].

Part B Premiums

Everyone pays a premium for Medicare Part B (medical insurance). The standard Part B premium is set by the government each year. However, if your income is above a certain threshold, you will pay more. This is called the Income-Related Monthly Adjustment Amount (IRMAA). Your dollars are votes, and it's important to know how your income affects your Medicare costs.

Part D Premiums

If you choose the Traditional Medicare path, you'll need to add a standalone Part D plan for prescription drug coverage. Part D premiums vary widely depending on the plan you choose and where you live. Like Part B, higher earners may also pay an IRMAA surcharge on their Part D premiums.

Medicare Advantage (Part C) Premiums

If you choose the Medicare Advantage path, you still have to pay your Part B premium. Many Advantage plans advertise a "$0 premium," but remember, you are still paying that Part B premium to the government. The Advantage plan itself might not charge an additional premium, but you are trading that for network restrictions and potential out-of-pocket costs when you need care.

Medicare Supplement (Medigap) Premiums

If you choose Traditional Medicare, you can add a Medigap policy to cover the out-of-pocket costs that Medicare doesn't pay. Medigap premiums vary by the plan letter you choose, your age, your gender, and where you live. Remember, the supplement decision comes AFTER you choose Traditional Medicare - it's a component of the Traditional path, not an alternative to Advantage.

You've worked hard to build your life, and you deserve to protect what you've earned. Don't let confusing Medicare premiums catch you off guard. We are built by people like you, and we're on your side of the table. We can walk you through every option and help you find the right coverage for your budget.