Medicare provides essential health coverage to millions of seniors, including those who are still working, as well as those who are retired and on Social Security. But Medicare isn't free. In fact, Part B, which covers outpatient care, charges a monthly premium that changes from year to year.

Currently, the standard monthly Part B premium is $144.60. In 2021, it's increasing by $3.90 to $148.50. That's actually a relatively modest jump compared to previous increases.

Still, some seniors will inevitably pay more for their Part B coverage in 2021. If you're a higher earner, you'll need to prepare to pay an income-related monthly adjustment amount, or IRMAA, that will make Medicare even more expensive for you.

Older man at laptop holding his head

Image source: Getty Images.

What higher earners will pay for Medicare in 2021

It's easy to argue that being a higher earner in retirement is a good thing. But when it comes to paying for Medicare, it can come back to bite you. IRMAA surcharges for Medicare Part B are based on your modified adjusted gross income from two years prior, so for 2021, the amount you'll pay is based on your 2019 tax return.

Here are the income brackets where IRMAAs apply and the subsequent Part B costs you'll face if you're a higher earner:

2019 Income: Individual Tax Return

2019 Income: Joint Tax Return

2019 Income: Married With Separate Tax Return

Monthly Part B Premium for 2021

$88,000 or less

$176,000 or less

$88,000 or less


Over $88,000 up to $111,000

Over $176,000 up to $222,000

Not applicable


Over $111,000 up to $138,000

Over $222,000 up to $276,000

Not applicable


Over $138,000 up to $165,000

Over $276,000 up to $330,000

Not applicable


Over $165,000 and less than $500,000

Over $330,000 and less than $750,000

Over $88,000 and less than $412,000


$500,000 and above

$750,000 and above

$412,000 and above


Data source:

Keep in mind that IRMAAs apply to Medicare Part D, too.

Can you appeal your IRMAA?

If your financial picture has changed since you filed your 2019 tax return, you may be able to appeal your Medicare Part B surcharge, specifically if you:

  • Got married or divorced in the interim or became a widow
  • Lost out on a major income source (for example, lost your job when you were previously working)

There's also a chance the Social Security Administration could have the wrong tax information for you on file, so if you're hit with a surcharge, but don't think you earned enough to be liable for it, it pays to do some digging. If it turns out you're not subject to an IRMAA, you can appeal it, as well.

Know your Medicare costs

Part B premiums are only one expense you'll bear in the course of paying for Medicare. You'll also need to cover Part D premiums, supplemental insurance, copays, deductibles, and coinsurance. Plus, original Medicare doesn't cover certain essential health services, like dental care and vision exams, so you'll need to budget for those expenses, as well.

Even if you're a higher earner, your healthcare costs could end up being a source of stress when you're older. Your best bet, therefore, is to estimate those costs in advance so you know what you're in for.