How is Part B calculated?

Asked by: Isac Abernathy  |  Last update: February 16, 2025
Score: 4.4/5 (7 votes)

If we determine you're a higher-income beneficiary, you'll pay a larger percentage of the total cost of Part B based on the income you normally report to the Internal Revenue Service (IRS). You'll pay monthly Part B premiums equal to 35%, 50%, 65%, 80%, or 85% of the total cost, depending on what you report to the IRS.

How is Medicare Part B amount determined?

Part B. As previously stated, your income level will determine your Medicare Part B monthly premium amount. If your MAGI exceeds an income bracket, you move up to the next tier and pay a premium increase. Additionally, the annual deductible for all Medicare Part B beneficiaries is $257 in 2025.

Does everyone pay $170 for Medicare Part B?

Most people pay no premiums for Part A. For Medicare Part B in 2025, most beneficiaries will pay $185 per month. Certain factors may require you to pay more or less than the standard Medicare Part B premium in 2025.

How to calculate modified adjusted gross income for Medicare Part B?

Modified Adjusted Gross Income (MAGI) is the sum of:
  1. the beneficiary's adjusted gross income (AGI) (found on line 11 of the Internal Revenue Service (IRS) tax filing form 1040), plus.
  2. tax-exempt interest income (line 2a of IRS Form 1040).

How do I find out how much I am paying for Medicare Part B?

You can get details at Medicare.gov or by calling 1-800-MEDICARE (1-800-633-4227) (TTY 1-877-486-2048). For more information about higher premiums go to the Medicare Premiums: Rules for Higher-Income Beneficiaries page.

How Medicare B Premiums are Calculated?

22 related questions found

Is Medicare Part B free at age 65?

Medicare Part A (hospital insurance) is free for almost everyone. You have to pay a monthly premium for Medicare Part B (medical insurance). If you already have other health insurance when you become eligible for Medicare, you may wonder if it's worth the monthly premium costs to sign up for Part B.

What income level triggers higher Medicare premiums?

If you file your taxes as "married, filing jointly" and your MAGI is greater than $212,000, you'll pay higher premiums for your Part B and Medicare prescription drug coverage. If you file your taxes using a different status, and your MAGI is greater than $106,000, you'll pay higher premiums.

How do I estimate my adjusted gross income?

Start with your total (gross) income from all sources. This includes wages, tips, interest, dividends, capital gains, business income, retirement income and other forms of taxable income. From your gross income, subtract certain adjustments such as: Alimony payments.

What makes up modified adjusted gross income?

Education Credits: MAGI is calculated by adding AGI plus foreign earned income and housing exclusions, foreign housing deduction, excluded income by bona fide residents of Puerto Rico or American Samoa.

Why is Social Security no longer paying Medicare Part B?

There could be several reasons why Social Security stopped withholding your Medicare Part B premium. One common reason is that your income has exceeded the threshold for premium assistance. Another reason could be that there was a mistake or error in your records.

How do I avoid paying Medicare Part B?

Contact your local Social Security office. If you're dropping Part B and keeping Part A, we'll send you a new Medicare card showing you have only Part A coverage. Write down your Medicare Number in case you need to go to the hospital or get Part A-covered services until your new card arrives.

What does the average person pay for Medicare Part B?

Most people pay the standard Part B monthly premium amount ($185 in 2025). Social Security will tell you the exact amount you'll pay for Part B in 2025.

What is the 80/20 rule in Medicare?

The 80/20 Rule generally requires insurance companies to spend at least 80% of the money they take in from premiums on health care costs and quality improvement activities. The other 20% can go to administrative, overhead, and marketing costs. The 80/20 rule is sometimes known as Medical Loss Ratio, or MLR.

Does Medicare pay 100% on Part B?

Medicare Part B coinsurance

Coinsurance is a cost-sharing term that means insurance pays a percentage and you pay a percentage. With Medicare Part B, you pay 20 percent of the cost for the services you use. So if your doctor charges $100 for a visit, then you are responsible for paying $20 and Part B pays $80.

Can I deduct Medicare Part B premiums on my taxes?

Can you deduct Medicare Part B payments on your taxes? You can, but only if medical expenses exceed 7.5% of your adjusted gross income and you're itemizing deductions.

How to reduce your adjusted gross income?

Ways to Reduce Your AGI
  1. Contribute to a Retirement Account.
  2. Deduct Student Loan Interest.
  3. Deduct Education Expenses.
  4. Contribute to a Health Savings Account.
  5. Deduct Business Expenses.
  6. Other Ways to Reduce AGI.

How do I obtain my adjusted gross income?

Where do you find your AGI on your tax return?
  1. line 11 on Form 1040, 1040-SR and 1040-NR (2020 through 2024 tax years)
  2. line 8b on Form 1040 and 1040-SR (2019 tax year)
  3. line 7 on Form 1040 (2018 tax year)
  4. line 21 on Form 1040A (tax years before 2018)
  5. line 4 on Form 1040EZ (tax years before 2018)

How to calculate adjusted income?

The process for calculating adjusted income
  1. 1) Identify the amounts of income on which the taxpayer is charged to income tax for the tax year. ...
  2. 2) Deduct from the components the amount of any relief under a provision listed in relation to the taxpayer in section 24 to which the taxpayer is entitled for the tax year.

Does Medicare check your income every year?

Each fall, when we ask the IRS for information to determine next year's premiums, we ask for tax information to verify your reports of changes affecting your income-related monthly adjustment amounts, if any. We also ask the IRS for your two-year-old MAGI if we've temporarily used three-year-old MAGI.

How much money can you have in the bank if you're on Medicare?

There is no limit on the amount of cash you can have with Medicare Part A. You do have to have paid taxes for 40 quarters (10 years) during your working lifetime and you have to be age 65 unless otherwise qualified due to a social security eligible disability.

Does the sale of a house count as income for Medicare premiums?

Home sales.

If your capital gain from the sale of a home exceeds the exclusion amount ($250,000 for individuals, $500,000 for joint filers), it will be treated as taxable income. So, if you made a sizable profit downsizing, it could show up in your IRMAA calculation two years later.

How to drop Medicare Part B?

To find out more about how to terminate Medicare Part B or to schedule a personal interview, contact us at 1-800-772-1213 (TTY: 1-800-325-0778) or visit your nearest Social Security office.

How long does it take to get Medicare B after applying?

Coverage begins: Generally, the first month after you sign up. If you sign up for Part B while you're still working, or within the first full month after losing employer coverage, you can request to delay your Part B start date up to 3 months.

How do I prove I have Medicare Part B?

The Benefit Verification Letter shows if you're receiving Social Security benefits, but ALSO confirms your Medicare coverage. It will display your Part A hospital insurance start date, Part B medical insurance start date (if you enrolled), as well as your unique Medicare number.