Medicare premiums come out of your Social Security check, your bank account, or both, depending on which parts of Medicare you have and how you set it up

Most people on Medicare pay premiums — the monthly cost for Part B (doctor visits and outpatient care) and Part D (prescription drugs). Part A (hospital care) is usually free if you or your spouse paid Medicare taxes for at least 10 years. The way your premium leaves your pocket depends on whether you're already getting Social Security and which payment method you choose.

If you get Social Security, your Medicare Part B and Part D premiums are deducted directly from your monthly check before you receive it. If you don't get Social Security yet, or if you want to pay a different way, Medicare bills you directly and you can pay by mail, phone, or automatic bank withdrawal. The amount you pay changes each year and depends on your income from two years ago — higher earners pay more.

Key Takeaways

  • Part B and Part D premiums are deducted from your Social Security payment automatically unless you choose a different payment method.
  • If you don't receive Social Security, Medicare sends you a bill each month that you can pay by mail, phone, or automatic bank transfer.
  • Your premium amount is based on your income from two years prior, so changes in your earnings affect what you pay later.
  • You can change your payment method once a year during the annual enrollment period, or when ready if your circumstances change significantly.
  • Part A has no monthly premium for most people, but Part B and Part D premiums vary based on income and the specific plan you choose.

When premiums come out of Social Security

If you receive a Social Security benefit — retirement, disability, or survivor benefits — Medicare automatically deducts your Part B and Part D premiums from that payment. This happens before you see the money. The deduction appears on your Social Security statement each month, showing what you received and what Medicare took out.

This automatic deduction is called "premium withholding" and it's the default for most Medicare beneficiaries. You don't have to do anything to set it up; it happens once you're enrolled in Medicare and receiving Social Security. The amount withheld is your standard premium unless you may have access to for a subsidy based on income, in which case Medicare pays part of your Part D premium.

If your Social Security benefit is very small — smaller than your Medicare premium — Social Security will still deduct what it can, and Medicare will bill you separately for any remaining amount. This situation is rare but does happen to some people with very low benefits.

Paying Medicare directly if you don't get Social Security

If you're not yet receiving Social Security, or if you've chosen not to take it, Medicare sends you a bill each month. This bill arrives by mail or email, depending on how you've set up your account. You have several ways to pay: by check through the mail, by phone using a debit or credit card, or by setting up automatic withdrawal from your bank account.

Automatic bank withdrawal is the most common choice for people paying directly because it ensures you don't miss a payment. Missing a premium payment can result in a late enrollment penalty added to your premium permanently, so setting up automatic payment removes that risk. You can arrange this through Medicare.gov or by calling Medicare at 1-800-MEDICARE.

Some people choose to pay by check or phone payment month to month, which gives them flexibility but requires remembering to pay each time. If you travel frequently or prefer not to set up automatic payments, this method works, but you'll need to keep track of payment important date yourself.

How your income affects what you pay

Medicare uses your income from two years ago to calculate your Part B and Part D premiums. This is called "modified adjusted gross income" or MAGI, and it includes wages, interest, dividends, and some other sources. If your income was higher two years ago, you pay a higher premium now. If your income drops this year, your premium won't decrease until two years from now.

Higher earners pay an additional amount called an "income-related monthly adjustment amount" or IRMAA. For example, if you earned significantly more two years ago, your Part B premium might be two or three times the standard amount. This extra charge continues until your income drops below the threshold, which then takes effect two years later.

If your income has dropped recently — because you retired, had a major life change, or lost a job — you can request that Medicare recalculate your premium using your current year's income instead. This is called a "life-changing event" appeal, and it requires documentation of the change. Contact Medicare to find out whether your situation qualifies.

Changing how you pay your premiums

You can change your payment method once a year during the annual enrollment period, which runs from October 15 to December 7. You can also change when ready if you experience a may have access to life event, such as losing your job, moving to a different state, or losing access to employer coverage.

To change from Social Security withholding to direct billing, or vice versa, contact Medicare at 1-800-MEDICARE or log into your account at Medicare.gov. The change takes effect the following month. If you're switching from Social Security withholding to direct billing, make sure you have a plan to pay the bill when it arrives — don't assume Social Security will continue to deduct it.

Some people split their payment between Social Security withholding and direct billing if they want to reduce the amount taken from their Social Security check. You can arrange this by contacting Medicare and specifying how much you want withheld from Social Security and how much you want to pay directly.

What happens if you miss a payment

If you pay Medicare directly and miss a payment, Medicare will send you a notice and give you a grace period to pay. During this time, your coverage continues. However, if you don't pay within the grace period, your coverage can be terminated, and you'll have to re-enroll during the next enrollment period.

More importantly, if you miss a payment and don't pay it back, you may face a permanent late enrollment penalty. This penalty is added to your Part B or Part D premium for as long as you have Medicare. The penalty is calculated as a percentage of the premium you should have paid, and it compounds over time.

If you're having trouble paying your premium, contact Medicare to discuss your options. Some people may have access to for programs that help pay premiums based on income, and Medicare staff can tell you whether you might be may be able to access. It's better to call and ask about help than to let a payment slide.

Understanding your Medicare bill or statement

Your Medicare bill or statement shows your premium amount, the date it's due, and how to pay. If you're paying directly, the bill will list your Part B premium and your Part D premium separately, because they come from different parts of Medicare. Your Part B premium is the same for everyone at your income level, but your Part D premium varies depending on which drug plan you chose.

If you receive Social Security, your statement shows the deduction on your Social Security Explanation of Benefits, which you can view online or receive by mail. This statement breaks down how much was withheld for Part B, how much for Part D, and what your net Social Security payment is after the deductions.

If you notice an error on your bill — if the amount seems wrong or if you're being billed for a part of Medicare you don't have — contact Medicare right away. Errors do happen, and Medicare can correct them and adjust your bill if needed.

Frequently Asked Questions

Can I pay my Medicare premium with a credit card?

You can pay by credit card if you call Medicare at 1-800-MEDICARE and pay over the phone. If you're paying by mail, you can only pay by check. Automatic bank withdrawal must come from a checking or savings account, not a credit card. Some people use a credit card to pay their bank account and then have that account set up for automatic withdrawal, but this adds an extra step.

What if my Social Security check is smaller than my Medicare premium?

Social Security will deduct what it can from your check, and Medicare will bill you separately for the rest. This is rare, but it happens to people with very small benefits. You'll receive a separate bill from Medicare for the remaining amount, which you can pay by mail, phone, or automatic bank withdrawal.

Do I have to pay a premium for Part A?

Most people don't pay a monthly premium for Part A if they or their spouse paid Medicare taxes for at least 10 years. However, some people who didn't pay enough Medicare taxes during their working years do pay a Part A premium. You can find out whether you owe a Part A premium by checking your Medicare Summary Notice or calling Medicare.

Can I change my payment method in the middle of the year?

You can change your payment method once a year during the annual enrollment period (October 15 to December 7). If you have a may have access to life event — such as losing your job, moving, or losing employer coverage — you can change when ready. Contact Medicare to find out whether your situation qualifies for an when ready change.

What if I disagree with the premium amount I'm being charged?

If you think your premium is wrong because your income has changed or for another reason, contact Medicare and explain the situation. If you've had a major life change, you can request that Medicare recalculate your premium using your current income instead of income from two years ago. You'll need to provide documentation of the change.