Q & A
Ask Rusty – Is the Medicare Part B Premium a Percentage of our Social Security Amount?
Dear Rusty: I have a simple question: Is the amount we pay for Medicare Part B premium a percent of our Social Security amount we receive? Signed: Curious
Dear Curious: Your Medicare Part B premium is not based on a percentage of your monthly Social Security benefit amount. Medicare Part B premiums are set in October of each year by CMS (Centers for Medicare and Medicaid Services) and are based upon anticipated total costs of the Medicare program in the forthcoming year. Generally speaking, Medicare Part B enrollee premiums are expected to offset about 25% of CMS’ anticipated total Medicare Part B costs; the rest Is borne by the Federal Government. So, when CMS estimates Medicare program costs for the upcoming year, they also look at the number of anticipated Part B enrollees. They then divide 25% of total anticipated Part B program costs by the number of expected Part B enrollees, resulting in the “standard” Medicare Part B premium for next year. For 2026, the standard Part B premium amount is $202.90. The standard premium for 2027 will be announced in October 2026 and will likely be different.
It’s important to understand also that not everyone pays the “standard” Part B premium. Some lower income seniors may pay less because of the so-called “hold harmless provision,” and some higher income folks may pay more than the “standard” monthly Part B premium because of a provision called “IRMAA.”
The “hold harmless provision” says that monthly Social Security benefits cannot decrease as a result of a Medicare premium increase, so if the annual SS COLA (cost of living adjustment) is insufficient to offset any increase to the standard Part B premium, then the SS beneficiary may pay a smaller Part B premium amount so that their SS benefit doesn’t decrease (note there are exceptions to this rule).
Conversely, those with a higher “provisional income” (an IRS definition), may pay more than the standard Medicare Part B premium. That’s because of a provision known as “IRMAA” (Income-Related Monthly Adjustment Amount), which adds a supplemental amount on top of the standard Medicare Part B premium. IRMAA supplement amounts are determined using a sliding scale to define the required higher Part B premium for each income level category, and IRMAA will cause the Part B premium to be more than the standard premium amount. For those with exceptionally high incomes, the Part B premium can be as much as $690 per month.
FYI, income reported to the IRS two years ago is used to determine if an individual is subject to IRMAA for the forthcoming year. The reason for this is timing: when next year’s Part B premium is determined in October of each current year, the IRS has processed all tax returns for the preceding year but doesn’t yet have individual income for the current year. Thus, they must use a person’s income from October of the preceding year to determine who will pay the standard Part B premium next year, and who will pay a higher IRMAA amount.
And just to complete this picture, you should be aware that IRMAA also applies to Medicare Part D premiums. And that means that those with higher incomes who are affected by IRMAA for Part B will also pay a higher Medicare Part D premium. (Medicare Part D is private insurance coverage for prescription drugs). But none of this is related to your Social Security benefit amount.
This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website. (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org.Because we are a non-profit organization, all services are free.