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The Earn More, Pay More for Medicare “Disadvantage” Explained

If you are what Social Security considers a “higher-income beneficiary,” you pay more for Medicare Part B, the health-insurance portion of Medicare and Part D. (Most enrollees don’t pay for Medicare Part A, which covers hospitalization.)

The income thresholds for 2021 haven’t been announced yet, but using 2020 numbers, premiums for both parts come with a surcharge when your adjusted gross income (plus tax-exempt interest) is more than $87,000 if you are single or $174,000 if married filing jointly. Surcharges are based on adjusted gross income from two years earlier. In 2020, high earners pay $202.40 to $491.60 per month for Part B, depending on their income level in 2018, and they also pay extra for Part D coverage, from $12.20 to $76.40 on top of their regular premiums.

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