Are Medicare Costs Based On Your Income?

If you have a high income, there’s a good chance you’ll be in Medicare’s “higher-income” threshold, which means your Medicare costs will be more than the standard $185 Part B premium (as of 2025).

The current law requires your Medicare Part B premium to be adjusted as well as your Medicare prescription drug coverage premium (Part D) based on your income.‍

This affects roughly 8% of all Medicare enrollees, but if you’re part of the 8%, you may want to know just how much more you’ll be forking over for your post-65 insurance.

Need Medicare or retirement planning help? The Senior Allies team specializes in Medicare health insurance as well as retirement planning. Call us today at 833-801-7999 for personalized help.

Paying More for the Medicare Part B Premium

Most people enrolled in Medicare pay $185 in 2025 for their Part B premium. That amount is actually only about 25% of the total cost. The government comes in and pays a substantial portion — about 75% — of the total Part B premium.

Social Security uses your most recent federal tax return to determine what’s called your modified adjusted gross income (MAGI).

If you’re filing jointly with your spouse and your MAGI is greater than $212,000, you’re going to pay more than $185 per month for your 2025 Medicare Part B premium. This is also true if your MAGI is greater than $106,000 and you file an individual tax return.

In other words, if you have a high income, the government is going to pay less, and you’re going to pay more.

How Much You Pay for Medicare Part B

There are several tiers depending on how much you make and how you file your taxes. Each tier adds more to your Part B premium, and the amount is based on a percentage.

Those percentages are 35%, 50%, 65%, 80%, and 85% of the total Medicare Part B premium. For example, if you’re in the highest tier, the government pays 15% of the Part B premium and you pay 85%.

• Individuals who make more than $106,000 and up to $133,000 or married couples who make more than $212,000 and up to $266,000 pay $259 per month
• Individuals who make more than $133,000 and up to $167,000 or married couples who make more than $266,000 and up to $334,000 pay $370 per month
• Individuals who make more than $167,000 and up to $200,000 or married couples who make more than $334,000 and up to $400,000 pay $480.90 per month
• Individuals who make more than $200,000 and up to $500,000 or married couples who make more than $400,000 and up to $750,000 pay $591.90 per month
• Individuals who make more than $500,000 or married couples who make more than $750,000 pay $628.90 per month

If you’re married and lived with your spouse at any time during the year but file your taxes separately, the tiers are a little bit different:

• Individuals who make between $106,000-$394,000 pay $591.90 per month
• Individuals who make $394,000 or more pay $628.90 per month

Paying More for the Medicare Part D Prescription Drug Plan Premium

Medicare Part D is your prescription drug coverage, and the government helps pay a lot of those costs, too. Just like with the Medicare Part B premium, your drug premium will go up depending on your income.

If you end up having to pay more because of your income, the amount will be deducted from your monthly Social Security check.

Here are what the income-adjustment tiers look like in 2025 for Part D premiums:

And here are the tiers for those who are married and live with their spouse but file their taxes separately:

• Individuals who make more than $106,000 and less than $394,000 pay an additional $78.60 per month
• Individuals who make $394,000 or more pay an additional $85.80 per month

RELATED: How Much Will Medicare Cost Me per Month?    

Determining Your Income

The extra amount you pay is based on your income from the most recent federal tax return. In 2025, that means you’d be looking at your 2024 tax return, which was filed in 2023. The IRS will provide this return to Social Security, so if something is incorrect or they have the wrong year, you can call or visit your local Social Security office.

If your income has gone down and moves you from one tier to another, you’ll also need to contact Social Security to explain the change. Some common reasons for an income change include:

• You married, got divorced, or became widowed
• You or your spouse stopped working
• You or your spouse lost an income-producing property because of a disaster
• You or your spouse’s pension plan got terminated or canceled

If this is the case, you’ll want to be prepared with documentation proving the income change. For example, if you just became widowed, you’d want to be prepared with a death certificate.

There’s a form for this called Form SSA-44 Medicare Income-Related Monthly Adjustment Amount — Life-Changing Event.

Conclusion

In short, the Medicare Part B premium and Medicare Part D premium are the only two Medicare costs that are based on your income.

Everything else, including deductibles and copayments, are going to be standard for everyone.

If you need any help signing up for or understanding Medicare, give us a call! Our team of licensed insurance agents will be glad to take the headache out of Medicare for you.