If you’re still working when you become eligible for Medicare at 65, most people pay nothing for Part A (hospital coverage) and $185 per month for Part B (medical coverage) in 2025, rising to $202.90 in 2026. But your actual costs depend on your work history, your income, your employer’s size, and which parts of Medicare you choose to enroll in while employed.
Part A Is Usually Free
Medicare Part A covers hospital stays, skilled nursing, and hospice care. If you or your spouse paid Medicare taxes for at least 10 years (40 work credits), you pay no monthly premium for Part A. Most people who’ve worked full-time careers easily meet this threshold. Because Part A is free for the vast majority of workers, many people enroll in it at 65 even if they plan to keep working and stay on their employer’s health plan.
If you have fewer than 40 credits, you’ll pay a monthly premium for Part A, but this situation is uncommon for people who are still actively employed at 65.
Part B Costs More for Higher Earners
The standard Part B premium is $185 per month in 2025 and $202.90 in 2026. You pay this every month regardless of whether you use any Part B services that month. If you’re still earning a salary, though, your income may push you into a higher bracket.
Medicare uses your tax return from two years ago to determine whether you owe an extra charge called IRMAA (Income-Related Monthly Adjustment Amount). For 2025, the thresholds and monthly surcharges on top of the standard premium are:
- Individual income up to $106,000 (joint up to $212,000): no surcharge
- Individual $106,001–$133,000 (joint $212,001–$266,000): $74 extra per month
- Individual $133,001–$167,000 (joint $266,001–$334,000): $185 extra per month
- Individual $167,001–$200,000 (joint $334,001–$400,000): $295.90 extra per month
- Individual $200,001–$499,999 (joint $400,001–$749,999): $406.90 extra per month
- Individual $500,000+ (joint $750,000+): $443.90 extra per month
At the highest bracket, you’d pay $185 plus $443.90, totaling about $629 per month for Part B alone. These surcharges also apply to Part D (prescription drug) plans. Because the calculation uses income from two years prior, your current working salary is what will trigger IRMAA when you enroll.
Whether You Need Part B Depends on Your Employer’s Size
This is the most important factor for working Medicare-eligible adults. The rules change based on how many people your employer has on payroll.
If your employer has 20 or more employees, your employer plan pays first and Medicare pays second. In this case, your employer coverage is your primary insurance, and you can safely delay enrolling in Part B without penalty. Many people in this situation skip Part B entirely while working to avoid paying the monthly premium on top of their employer plan costs.
If your employer has fewer than 20 employees, Medicare pays first and your employer plan pays second. This means you generally need to enroll in Part B when you turn 65, because Medicare becomes your primary coverage whether you want it to or not. Without Part B, your small-employer plan would only cover what Medicare doesn’t, leaving large gaps in your coverage.
Delaying Part B Without Penalty
If you work for a company with 20 or more employees and stay on that employer plan, you won’t face a late enrollment penalty when you eventually sign up for Part B. Medicare gives you a Special Enrollment Period that lasts for two full months after the month your employer coverage ends. So if you retire at 68, you have a window to enroll in Part B without any added cost.
The penalty for getting this wrong is permanent. If you delay Part B without qualifying employer coverage, you’ll pay an extra 10% on your Part B premium for every full 12-month period you could have signed up but didn’t. Someone who waited two years without creditable coverage would pay a 20% surcharge on every Part B premium for the rest of their life. In 2026, that would add roughly $40 per month to the $202.90 standard premium, with no way to remove it.
HSA Contributions Stop When Part A Starts
This catches many working people off guard. If you have a Health Savings Account through a high-deductible employer plan, you cannot contribute to it once you’re enrolled in any part of Medicare, including Part A. The IRS sets your contribution limit to zero starting with the first month of Medicare enrollment.
This matters because Part A enrollment is sometimes backdated. If you apply for Social Security after 65, your Part A coverage can be retroactively applied up to six months. Any HSA contributions you made during that retroactive period become excess contributions, and the IRS charges a 6% excise tax on them for every year they remain in the account.
If you’re 65 or older, still working, and relying on an HSA, you may want to delay enrolling in both Part A and Social Security to protect your tax-advantaged contributions. You can still use money already in your HSA; you just can’t add new funds after Medicare enrollment begins.
Medigap Timing When You Retire
Once you leave your job and enroll in Part B, you get a one-time, six-month Medigap Open Enrollment Period. During this window, insurance companies must sell you a Medigap (supplemental) policy regardless of your health status and cannot charge you more for pre-existing conditions.
This window starts when your Part B coverage begins, even if you sign up for Part B while still employed. Outside of this period, insurers in most states can deny you coverage or charge higher rates based on your health. Planning the timing of your Part B enrollment around this window is one of the most consequential decisions for workers transitioning off employer coverage.
What You’ll Actually Pay Each Month
For a worker at a large employer who enrolls only in Part A at 65 and delays Part B, the monthly Medicare cost is typically $0. You keep paying whatever your employer plan charges and add Medicare later when you retire.
For a worker at a small employer (fewer than 20 employees) who needs both Part A and Part B at 65, the baseline cost is $185 per month in 2025 for Part B, plus any IRMAA surcharge based on income. Part A remains free with sufficient work history. Add in a Part D prescription drug plan if your employer doesn’t offer creditable drug coverage, and total monthly costs can range from $185 to over $600 depending on income.
For higher earners still pulling a full salary, IRMAA is often the biggest surprise. A couple filing jointly with $300,000 in modified adjusted gross income would pay $185 plus $185 in IRMAA, totaling $370 per month per person for Part B alone. That’s $8,880 per year for the couple before any deductibles, copays, or supplemental coverage.