High Medicare Costs: An Explanation of Surprisingly Expensive First Bills

In this article, we'll delve into the essential aspects of Medicare surcharges and bills, providing you with a clear understanding of what to expect.

Firstly, it's important to note that Medicare Part B premiums are billed quarterly, meaning you pay for three months at a time. For 2025, these premiums range from $74.00 to $443.90 for Part B, and from $13.70 to $85.80 per month for Part D. These surcharges apply to individuals who earn over $106,000 (single filers) and $212,000 (joint filers). If you haven't started receiving Social Security payments yet, you will have to pay Medicare Part B premiums directly.

If your income exceeds certain thresholds, you may have to pay an additional amount on top of your standard Part B and Part D premiums. This additional charge is called the Income-Related Monthly Adjustment Amount (IRMAA). The Social Security Administration determines the IRMAA surcharge based on the adjusted gross income reported on your tax return from two years prior.

Late enrollment in Medicare Part B can result in a monthly penalty of an extra 10% of the standard premium for each full 12-month period you were eligible but didn't sign up. Enrollment for Medicare is required at age 65, or you will face late enrollment penalties. However, you won't have a late-enrollment penalty as long as you sign up within eight months of losing work-based coverage or losing coverage under your spouse's insurance.

If your income is above a certain amount, you'll receive a bill for your Part B and D IRMAA surcharges each month. You are responsible for paying the IRMAA, even if your employer or a third party pays your Part D plan premiums. If you pay for Part B, you'll get a bill that includes your Part B IRMAA, if you owe one, every three months.

It's also worth mentioning that if you miss a payment or if Medicare receives your payment late, your next bill will also include a past-due amount. If you haven't started receiving Social Security payments yet, you will have to pay Medicare Part B premiums directly. If you're collecting Social Security benefits before age 65, you will be automatically enrolled in both Medicare Parts A and B.

If your bill says "Delinquent Bill" and you don't pay the full amount by the due date, you could lose your Medicare coverage. To help you understand your Medicare bill better, you can view a sample Medicare bill (CMS-500) that explains the various parts of the bill and what the information in each section means.

Lastly, it's important to remember that Medicare Part A hospital insurance is often not charged a premium for individuals who have at least 40 quarters of Medicare-covered employment. However, if your income exceeds certain thresholds, you may have to pay an additional amount on top of your standard Part A premiums.

In conclusion, understanding Medicare surcharges and bills is crucial for seniors to ensure they are well-prepared for their healthcare expenses. By familiarising yourself with the key aspects outlined in this article, you can make informed decisions about your Medicare coverage and avoid potential penalties and additional costs.