With Part D, Medicare determines the additional amount you pay based on your reported tax income, but your total costs will depend on which Part D plan you have. Monthly premiums vary depending on the plan you sign up for. The amount may change each year. You may also have to pay an additional amount each month depending on your income. If you're a higher-income beneficiary with Medicare prescription drug coverage, you'll pay your monthly premiums plus an additional amount.
This amount is based on what you report to the IRS. Because individual plan premiums vary, the law specifies that the amount is determined using a base premium. We link the additional amount you pay to the beneficiary's base premium, not to the amount of your own premium. If you're a higher-income beneficiary, we deduct this amount from your monthly Social Security payments, regardless of how you usually pay your monthly premiums for your prescription drug plan.
If the amount is more than your monthly Social Security payment, or if you don't receive monthly payments, you'll receive a separate bill from another federal agency. This agency can be the Centers for Medicare and Medicaid Services or the Railroad Retirement Board. Medicare supplement and Part C and D premiums vary depending on the plan you choose. For Original Medicare, you must enroll in Part A and Part B.
You'll get additional coverage by adding a Medicare supplement plan and Part D drug coverage. There are no income limits for receiving Medicare benefits, but you can pay more for your premiums depending on your income level. If you have a limited income, you may be eligible for assistance paying Medicare premiums. It varies depending on the Medigap policy you purchase, where you live and other factors.
For most beneficiaries, the government pays a significant portion of the total costs of this coverage and the beneficiary pays the rest. On November 8, 2024, the Centers for Medicare and Medicaid Services (CMS) released the premiums, deductibles and coinsurance amounts for 2025 for Medicare Part A and B programs and monthly adjustment amounts related to Medicare Part D income for 2025. Your Medicare supplement plan will cover your costs beyond the numbers listed above for plans A, D, F, G, M and N without limits. By learning how to manage and possibly reduce your income for calculating premiums, and by familiarizing yourself with the income limits set for premiums, the income calculation method used, and the types of income that could increase your premiums, you can ensure you're getting the most out of your Medicare benefits.
