Why Is My First Medicare Bill So High?

Shocked woman holding big Medicare bill at home.

(Image credit: Getty Images)

A higher-than-expected first Medicare bill can be a surprise for many people. This often happens because the bill covers more than just one month's premium or includes additional surcharges or penalties.

It's important to keep in mind that how much you pay for Medicare overall will depend on how much you earned two years before you sign up. If you earn over a certain threshold, you will pay a monthly surcharge on top of your Part B and Part D premiums; this is called the IRMAA or the income-related monthly adjustment amount. However, this surcharge is based on your tax return from two years ago. It's a good idea to take note of your income from two years prior when you fill out your Medicare application; it can help you estimate whether or not you might be liable for this extra charge.

Important Medicare enrollment information

Before we move on any further, let's cover some basics. You become eligible for Medicare when you turn 65. There is no early enrollment option if you decide to retire early or begin collecting Social Security before age 65. However, if you are collecting benefits before your 65th birthday, you will be automatically enrolled in both Medicare Parts A and B. You can decline Part B coverage, but can't disenroll from Part A.

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Otherwise, you must enroll for Medicare at age 65, or you will pay late enrollment penalties. However, the rules are different if you are still covered by an employer-provided health care plan. If you or your spouse (if you’re covered by your spouse’s insurance) is still working for a firm with 20 or more employees, the employer’s insurance is your primary coverage. Moreover, you aren’t required to sign up for Medicare at 65, and you won’t have a late-enrollment penalty as long as you sign up within eight months of losing work-based coverage or losing coverage under your spouse’s insurance.

Many people still sign up for Medicare Part A hospital insurance at age 65, even when they are covered by an employer plan. And why not? About 99% of Medicare beneficiaries do not have a Part A premium. Part A is premium-free if you or your spouse has at least 40 quarters of Medicare-covered employment. It can serve as your secondary coverage, filling in the gaps left by your employer's coverage.

Here's a breakdown of the most common reasons why your first Medicare bill might be so high:

Unlike most of your monthly bills, Medicare Part B premiums are often billed quarterly, meaning you are paying for three months at a time. The first bill may be even higher, as it may include retroactive premiums from the date your coverage started. Essentially, you pay ahead for three months of original Medicare coverage when you first sign up, and you pay for each quarter in advance after that. This can make your first payment shockingly high.

Medicare provides an example to illustrate how this can be the case: If you sign up for Medicare in February and your coverage begins February 1st, your premium will be billed quarterly, and your first bill will be dated March 28. It will arrive around April 10 and be due April 25. This bill covers the next three months and includes any premiums you weren't previously billed for. That means your first bill would include the previous amount owed (for February, March, and April) and what you owe for the upcoming three months (May, June, and July). Moving forward, your future bills will be for only three months at a time.

In most cases, the cost of your Medicare Part B premium is deducted from your Social Security payment, so you never receive a bill that you actually have to pay. You may still receive a statement from Medicare reflecting premiums that have been paid, but it will be marked, “This is Not a Bill.”

So, if you enrolled in Medicare but haven’t started receiving Social Security payments yet, there is nothing to pay your premiums from, and you will have to pay these charges directly. That is why you receive a bill, not a statement. This will change after you begin collecting Social Security: if your premium is larger than your benefit, you will continue to receive a bill for the difference.

2. Late enrollment penalties

If you don't enroll in Medicare Part B, and in some cases, Part A, when you are first eligible, you may have to pay a late enrollment penalty. This penalty is not a one-time fee; it is added to your monthly premium for as long as you have Medicare. If you have credible coverage from your employer, you aren't penalized for maintaining your workplace benefit.

How much more?

Part B Penalty: The penalty is an additional 10% of the standard monthly premium for each full 12-month period you were eligible for Part B but didn't enroll. The penalty is permanent.

Medicare Part D penalty: This penalty applies if you go 63 days or more without creditable prescription drug coverage. The penalty is permanent and is added to your Part D plan's premium for as long as you have Part D coverage.

Part A Penalty: If you have to pay a premium for Part A and you don't sign up when you're first eligible, your monthly premium may go up by 10%. You'll have to pay this higher premium for twice the number of years you could have had Part A, but didn't.

If your income is above a certain threshold, you may have to pay an extra amount on top of your standard Part B and Part D premiums. This is called the Income-Related Monthly Adjustment Amount, or IRMAA. The Social Security Administration (SSA) determines this surcharge based on the adjusted gross income reported on your tax return from two years prior. This additional charge can significantly increase your premiums above the standard amount.

For 2025, IRMMA Part B surcharges range from $74.00 to $443.90 and from $13.70 to $85.80 per month for Part D. These surcharges kick in for single filers who make over $106,000 and at $212,000 for couples that file jointly. In 2026, the Part B surcharges will range from $81.20 to $487.00, and the Part D surcharges will range from $14.50 to $91.00. The surcharges apply to single filers who make at least $109,000 and couples who earn at least $218,000.

Medicare billing practices

Bills sent by Medicare typically arrive around the 10th of the month. All Medicare bills are due on the 25th of the month. In most cases, your premium is due the same month that you get the bill. If you miss a payment or if Medicare receives your payment late, your next bill will also include a past-due amount. To ensure your payment is on time, the CMS recommends that you submit your payment at least five business days before the due date.

Be aware that if your bill says “Delinquent Bill” and you don’t pay the full amount by the due date, you could lose your Medicare coverage.

You can take a look at a sample Medicare bill (CMS-500) that explains the various parts of the bill and what the information in each section means.

Swipe to scroll horizontally

Medicare billing cycles:
If you pay for:		You’ll get a bill:
Part B	this will include your Part B IRMAA, if you owe one	Every 3 months
Part B IRMAA	An extra amount you pay in addition to your Part B plan premium, if your income is above a certain amount	Every month
Part D IRMAA	An extra amount you pay in addition to your Part D plan premium, if your income is above a certain amount	Every month
Part A	Hospital insurance premium	Every month

How to pay your Medicare bill and IRMAA surcharges

Paying your Medicare premiums, surcharges and penalties is easy. Whether you want to pay by check, credit card, debit card or money order, there is a way to make the payment. If you don't want to hassle of making a monthly payment, there are ways to set up automatic payments from your checking or savings account.

IRMAA surcharges. It’s your responsibility to pay the IRMAA, even if your employer or a third party (a retirement system) pays your Part D plan premiums. You’ll receive a bill each month from Medicare for your Part B and D IRMAA surcharges, and you can pay it the same way you pay your Part B premiums.

Here are four ways you can pay your premiums:

Online through your secure Medicare account, which is the fastest way to pay. Use this free service to pay by credit card, debit card or from your checking or savings account. Don’t create or use a Pay.gov account to make your Medicare payment. Use your Medicare account to pay your bill.
Sign up for Medicare Easy Pay. With this free service, Medicare automatically deducts your premium payments from your savings or checking account each month. It can take up to six to eight weeks for your automatic deductions to start. You'll need to pay your premiums another way until your automatic deductions start.
Mail your payment to Medicare. You can pay by check, money order, credit card, or debit card. If you’re paying by check, money order, or mail-in credit card, your payment will be delayed if you don’t include the payment slip. Use the return envelope that came with your bill, and mail your Medicare payment coupon and payment to: Medicare Premium Collection Center, PO Box 790355, St. Louis, MO 63179-0355.
- Caution: If you are paying by debit or credit card, and you don’t sign and include the payment slip, your payment won’t be processed and will be returned to you. Write your Medicare Number on the check or money order.
Use your bank’s online bill payment service to pay monthly or set up an automatic monthly payment.
Payments by phone are not accepted.

What to do next

If your first bill is higher than you expected, don't panic. First, review the bill carefully to determine which months it covers and if any penalties or surcharges are listed. You can also contact the Social Security Administration or Medicare for clarification. Understanding the reasons behind the higher cost can help you prepare for future payments and ensure you are being billed correctly.

If you or a spouse has a health savings account (HSA), you are in luck. You can use the account to reimburse yourself for amounts paid for premiums, co-payments and deductibles.

Donna joined Kiplinger as a personal finance writer in 2023. She spent more than a decade as the contributing editor of J.K.Lasser's Your Income Tax Guide and edited state specific legal treatises at ALM Media. She has shared her expertise as a guest on Bloomberg, CNN, Fox, NPR, CNBC and many other media outlets around the nation. She is a graduate of Brooklyn Law School and the University at Buffalo.