The good news is that anyone aged 65 or older or receiving disability insurance through Social Security for two years or more qualifies for Medicare coverage, regardless of their income. However, the amount individuals pay for certain Medicare premiums varies based on their income. To determine income for Medicare premium calculations, individuals need to look at their tax returns from the previous year. If there has been a significant decrease in income due to life events like divorce or the death of a spouse, individuals can apply for a reduction in their premiums.
For Medicare Part A, which covers hospital care, hospices, skilled nursing facilities, and home care, almost every beneficiary does not have a premium because they have 40 or more quarters of Medicare-covered employment. On the other hand, income has the most significant impact on premiums for Medicare Part B, which covers doctor visits, outpatient care, home health services, and medical equipment. The standard monthly premium amount for Part B in 2023 is $164.90 and applies to those with a modified adjusted gross income (MAGI) of up to $97,000 as an individual or up to $194,000 as a married couple filing taxes jointly. Premiums increase based on higher incomes, with the maximum monthly premium for 2023 being $560.50 for individuals with a MAGI greater than or equal to $500,000 or couples with a MAGI greater than or equal to $750,000.
Medicare Part C plans, also known as Medicare Advantage plans, are an alternative to Parts A and B and often provide additional coverage. Monthly premiums for these plans are not based on income. Medicare Part D offers additional prescription drug coverage, with premium amounts based on the same income numbers as Part B. At the highest income levels, individuals with a MAGI greater than or equal to $500,000 or couples with a MAGI greater than or equal to $750,000 would pay an additional premium of $76.40 per month. Lower-income Medicare beneficiaries can access several programs, such as Medicare Savings Programs (MSPs), which offer coverage for Part A and Part B deductibles, coinsurance, and copayments. The Medicare Extra Help program helps individuals pay for Part D drug coverage premiums, deductibles, coinsurance, and other costs, with income and asset qualifications for eligibility.