I often get asked by people about their cost for Part A and Part B of Medicare and does their income determine what their premiums are going to be. The simple answer is yes, they do.
For most people, Part A of Medicare is at no cost because they’ve qualified for it. And the cost for Part B of Medicare is going to be based on past income.
There are six different levels of costs for Medicare Part B. As low as $148.50 for people who are making less than $88,000, or married filing jointly making less than $176,000. But, your Medicare Part B premiums could be as high as $504.90 if you’re making more than half a million dollars a year. So, the simple answer is you’re going to have to determine what your income was prior to Medicare enrollment.
To determine premium, Medicare goes back two years and looks at what your income was to determine what this year’s costs are going to be. In 2021 your Medicare Part B costs are going to be determined based on your income in 2019. In 2022, your premiums are going to be based on what your income was in 2020.
There’s always a two-year lag in regard to what your costs are going to be, and it does change every year.