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. 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 you can’t disenroll from Part A.

Otherwise, you must enroll in Medicare at age 65, or you will pay late enrollment penalties. But the rules are different if you have coverage through an employer-provided health care plan. If you or your spouse (if you’re covered by their plan) is still working for a firm with 20 or more employees, the employer’s insurance is your primary coverage. In this scenario, you aren’t required to sign up for Medicare at 65. Most importantly, you won’t have late-enrollment penalties 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 have employer-provided coverage. 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:

1. The most likely explanation: You’re not collecting Social Security yet and the bill covers multiple months

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.

3. Income-Related Monthly Adjustment Amount (IRMAA)

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 2026, IRMAA Part B surcharges range from $81.20 to $487.00 and from $14.50 to $91.00 per month for Part D. These surcharges kick in for single filers who make over $109,000 and at $282,000 for couples who file jointly. The official 2027 brackets and surcharges are usually released in early November. If you’d like a preview, read Projected 2027 IRMAA Brackets and Surcharges for Medicare Parts B and D.

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 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 paying 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.

Medicare billing cycles:

How to pay your Medicare bill and IRMAA surcharges

Paying your Medicare premiums, surcharges, and penalties is easy, whether by check, credit card, debit card, or money order. If you don’t want the 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 them the same way you pay your Part B premiums.

Here are four ways you can pay your premiums:

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 premiums, copayments and deductibles.

(Donna LeValley is a retirement writer for Kiplinger.com.)

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