Cost of Medicare, How to Sign Up & How to Avoid Penalties

Welcome back to the "New to Medicare" Bootcamp!

This is Day 2 of our five-day series where I walk you through everything you need to know about Medicare so you can stop feeling overwhelmed and start feeling in control. 

If you missed Day 1, we talked all about when you should actually sign up for Medicare and how everyone’s timeline is a little different. You can catch that post right here.

One of the biggest concerns people have when they’re new to Medicare is:

“How much is this going to cost me?”

Some people come from paying next to nothing on a Marketplace plan, and others are paying over $1,000 a month for retiree coverage or COBRA and can’t wait to lower their costs. 

Let’s break this down piece by piece so you know what to expect.

Part A and Part B: The Basics

• Part A (Hospital Coverage):
  Most people get this for free because they paid Medicare taxes while working.
• Part B (Doctor Coverage):
  In 2025, the base premium is $185/month.
  But if you’re considered high income, you may pay more.

Social Security uses your income from two years ago to set your premium. That’s your Modified Adjusted Gross Income (MAGI) from your 2023 tax return.

Here’s a quick look at the income brackets for couples filing jointly:

These numbers go up a little most years, and I’ll always keep you updated in future posts or inside my Facebook group.

What About Drug Costs? (Part D)

Part D is your Medicare drug coverage.

How you get Part D depends on which type of plan you choose;  Medigap or Medicare Advantage.

Here’s what to know:

• Stand-alone drug plans usually cost $10–$40/month, though some can be as low as $0 or as high as $100+
• Deductibles for Part D plans in 2025 can be as high as  $590, but many plans waive the deductible for lower tier drugs.
• If you’re high income, you’ll pay an extra charge on top of your regular premium called IRMAA (Income Related Monthly Adjustment Amount). It starts at $13.70/month and goes up from there based on your income bracket

💊 Good news: Starting in 2025, your total drug spending is capped at $2,000/year, and you’ll be able to spread out high costs over 12 months if needed.

Medicare Deductibles (And Why They’re Not As Scary As You Think)

Let’s talk about the “D-word”: deductibles.

If you’ve had a plan before with a $5,000 deductible, you might be bracing for the worst. But Medicare is different:

• The Part B deductible in 2025 is just $257 per year
• If you have a Medigap Plan G, that’s literally the only out-of-pocket cost you’ll have all year, for covered services
• Drug plan deductibles are separate and vary by plan

Compared to many group or marketplace plans, this is refreshingly low.

How Much Do the Plans Themselves Cost?

Let’s talk about the two main types of plans you can choose in addition to Original Medicare:

1. Medigap (Supplement) Plans

• Most comprehensive = Plan G
• Cost: $90–$200+/month depending on your location, age, gender, etc.
• Lower monthly cost = Plan N
• Cost: $75–$150+/month
• Budget-friendly option = High Deductible G
• Cost: $30–$65/month

💡 These plans don’t include drug coverage, so you’ll need a separate Part D plan.

2. Medicare Advantage Plans

• Often $0/month premium (but not always)
• Includes drug coverage
• Pay copays as you go, such as $0-$50 for a doctor visit, $125 for ER, etc.
• Benefits vary by ZIP code & rural areas usually have fewer options, while cities have more.

How to Sign Up (and Avoid Penalties)

A quick refresher:

• Your initial Medicare window is 7 months: 3 months before your 65th birthday month, your birthday month, and 3 months after.
• Best time to sign up: 3 months before your birthday month.
• If you’re already collecting Social Security, Medicare will enroll you automatically.
• If you’re not, go to ssa.gov and apply online.
• If you’re still working, you may be able to delay, but only if you have insurance through current employment (not COBRA, retiree, or marketplace plans!)

⚠️ Penalty alert: If you delay and don’t have qualifying coverage, you’ll pay a 10% penalty for every year you didn’t sign up on Part B- for life.

Quick Tip: If You Have an HSA…

If you’re still working and contributing to an HSA, do not sign up for Part A, or you’ll lose the ability to contribute. This only applies to the person with the HSA, not their spouse.

Feeling Stuck?

You can absolutely do all of this research and enrollment on your own. But if you’d rather make things easier, skip the second-guessing, and get organized with a step-by-step guide.

I've got just the thing.

I created a free 2025 Medicare Roadmap Workbook that walks you through everything in the right order, including the costs we talked about today.



Ready to Take the Next Step?

Now that you’ve got a handle on Medicare costs, it’s time to explore your plan options.

👉 Click here to read the next post

In that post, I’ll break down how each plan type works, what they cover, and what to consider when choosing between them, so you can move forward with clarity and confidence.

See you over there!

Pam