Your obligation to pay Medicare premiums doesn't end
When you enroll in Medicare, your obligation to pay premiums for most parts of your coverage does not end at a specific age. Instead, premiums for Part B (medical insurance), Part D (prescription drug coverage), and many Medicare Advantage (Part C) and Medigap plans are typically paid for the duration of your enrollment. Your responsibility to pay continues as long as you wish to remain covered by that specific plan.
The most significant exception to paying a premium relates to Medicare Part A (hospital insurance). The Centers for Medicare & Medicaid Services (CMS) reports that about 99% of beneficiaries do not pay a premium for Part A. This is because they (or their spouse) paid sufficient Medicare taxes while working for at least 10 years, which corresponds to 40 work credits.
Breaking down Medicare premiums by part
To understand your potential costs, it's essential to look at the different parts of Medicare and their associated premiums. Each part operates under different rules regarding how long you are expected to pay.
Medicare Part A (Hospital Insurance)
- Premium-free: Most people get premium-free Part A because they worked and paid Medicare taxes for at least 10 years. This benefit does not expire at a specific age. You will continue to have premium-free Part A as long as you meet the eligibility criteria.
- Paying a premium: If you or your spouse worked for less than 10 years, you may have to pay a monthly premium to get Part A. The premium amount is based on your work history. If you are paying a premium, you must continue to do so to remain enrolled.
Medicare Part B (Medical Insurance)
- Mandatory premium: Part B is voluntary coverage, but almost all enrollees must pay a monthly premium, regardless of age. There is no age at which this payment stops. The standard premium amount is set annually by CMS, with most beneficiaries having it automatically deducted from their Social Security benefit payments.
- Higher income surcharge (IRMAA): High-income beneficiaries pay a higher Part B premium, known as the Income-Related Monthly Adjustment Amount (IRMAA). This surcharge also continues indefinitely and is based on your modified adjusted gross income (MAGI) from two years prior.
Medicare Part D (Prescription Drug Coverage)
- Private plan premiums: Part D plans are offered by private insurance companies that contract with Medicare. Premiums for these plans vary widely and are paid to the insurance company, not Medicare directly. Your premium will not stop at a certain age.
- IRMAA for Part D: Similar to Part B, high-income beneficiaries are also subject to an IRMAA surcharge for their Part D coverage. This additional amount is paid directly to Medicare and is based on the same income thresholds as the Part B IRMAA.
Can your premiums ever be reduced or eliminated?
While you won't stop paying most Medicare premiums just for reaching a certain age, there are specific circumstances under which your costs can be reduced or eliminated. These are primarily related to changes in your income or eligibility for federal and state assistance programs.
- Qualifying for premium-free Part A: If you did not initially qualify for premium-free Part A, you may become eligible later if you or your spouse works long enough to accumulate 40 work credits. Once achieved, you will no longer need to pay the Part A premium.
- Reduction or waiver of IRMAA: If you were previously subject to an IRMAA surcharge for Part B or Part D but have experienced a life-changing event that significantly reduced your income, you can appeal for a new determination. Qualifying events include retirement, death of a spouse, or loss of an income-producing property. This can reduce or eliminate the surcharge, but not the standard premium.
- Medicare Savings Programs (MSPs): Low-income individuals may qualify for a state-run Medicare Savings Program. These programs can help pay for Part B premiums and, in some cases, other cost-sharing amounts. Eligibility is based on income and resource limits, which are adjusted annually.
- Extra Help: This is a federal program that helps people with limited income and resources pay for their Medicare Part D premiums, deductibles, and other costs. If you qualify, your Part D premium can be significantly reduced or even eliminated.
Comparison of premium requirements
| Feature | Medicare Part A (Hospital Insurance) | Medicare Part B (Medical Insurance) | Medicare Part D (Prescription Drug) |
|---|---|---|---|
| Do premiums stop? | Yes, if you meet the 40 work credit requirement, it is "premium-free" for life. | No, a premium is typically paid for the duration of enrollment. | No, premiums are paid for the duration of enrollment in a specific plan. |
| How long do you pay? | If you don't qualify for premium-free, you pay indefinitely unless you earn more work credits. | Indefinitely, as long as you are enrolled in Part B. | For the duration of your enrollment in a particular Part D plan. |
| Income-based adjustment? | No, the premium is based on work history, not income level. | Yes, higher income leads to an Income-Related Monthly Adjustment Amount (IRMAA). | Yes, higher income leads to an Income-Related Monthly Adjustment Amount (IRMAA) for the premium. |
| Can you get help paying? | Yes, through the Qualified Disabled and Working Individuals (QDWI) program if you are under 65 and meet certain requirements. | Yes, through Medicare Savings Programs (MSPs) for low-income individuals. | Yes, through the Extra Help program for those with limited income. |
| Late enrollment penalty? | Yes, if you don't sign up when first eligible and have to pay a premium. | Yes, for as long as you have Part B coverage. | Yes, for as long as you are enrolled in Part D. |
Conclusion
For most people, the idea that Medicare premiums stop at a certain age is a misconception. While you may never have to pay a premium for Part A due to your work history, the premiums for Part B and Part D are ongoing obligations that continue as long as you are enrolled. Furthermore, individuals with higher incomes face additional surcharges through IRMAA, which are also ongoing. The only real way to stop paying a premium is to lose eligibility for or voluntarily disenroll from the program, or to qualify for one of the specific low-income assistance programs available. Planning your retirement and health care costs should therefore account for the reality of long-term Medicare premium payments. For more information, the official Medicare website is an authoritative source for understanding your costs and options.
