Have questions about your Medicare payments? In this article, you’ll find answers to most major questions involving Medicare premium payments.
In this article:
- What Does Each Medicare Part Cover?
- How Will I Be Charged for My Premiums?
- How Do You Pay for Medicare?
- Can Medicare Payments Be Deducted Through Social Security Payments?
- What Happens with Late Medicare Payments?
- Other Questions About Medicare Payments, Coverage, Premiums Bills
Everything You Need to Know About Medicare Payments and Premiums
Medicare Premiums Definition: These premiums dictate the Medicare coverage a person is entitled to based on the periodic payments they make towards Medicare.
What Does Each Medicare Part Cover?
Part A covers hospital insurance, while Part B covers medical insurance. These two combined make up what’s called Original Medicare.
Part C is also known as the Medicare Advantage (MA) Plan. This is a health plan offered by a private health company in partnership with Medicare.
Part C includes both Part A and Part B, and may also offer extra coverage for dental, hearing, vision, and health/wellness programs. This also includes Part D, which covers prescription drugs.
How Will I Be Charged for My Premiums?
Typically, those who are 65 and already receiving benefits from Social Security will be automatically signed up to Medicare Part A and B. However, those who are over 65 and aren’t receiving Social Security benefits will need to sign up.
Once you’re enrolled in Medicare, here’s what you need to know about how Medicare charges for each premium.
Part A Premiums
In most cases, people who turn 65 receive automatic enrollment in Medicare Part A. Those who are at least 65 and aren’t receiving Social Security benefits need to sign up with Medicare.
Those who are already receiving Social Security or Retirement Railroad benefits are entitled to “premium-free Part A,” which means they won’t be charged for their Part A premiums. Other eligibility requirements for premium-free Part A for those aged 65 include:
- If you or your spouse worked a government job that provided you with Medicare coverage
- You haven’t filed for Social Security or Retirement Railroad benefits yet, but are eligible for either one of them
Those who don’t meet the criteria for premium-free Part A have to pay up to $437/month. This can go down to $240 if you’ve been paying Medicare taxes for at least 30 quarters.
Part B Premiums
Similar to Part A, people who turn 65 are automatically signed up for Part B during the month they turn 65, in most cases. If this is the case, your premium payments are charged to your benefits for either:
- Social Security
- The Railroad Retirement Board (RRB)
If you aren’t receiving these benefits, you’ll receive a Part B bill from Medicare. The standard B premium for 2019 is $135.50, but if your modified adjusted gross income (AGI) is higher than a certain amount, you need to pay the Income Related Monthly Adjustment Amount (IRMAA), which is an additional charge on top of your premium.
Part C Premiums
For Part C, Medicare pays a fixed amount that goes towards your plan. However, each plan has different guidelines (e.g. some may require a referral first to see a specialist) and out-of-pocket costs as determined by the health care provider.
Your provider sets the amount you need to pay for premiums and your coverage rather than Medicare. Changes to Part C costs may only be implemented once a year.
Part D Premiums
If you opted for the Original Medicare, you need to pay Part D separately. However, if you opted for Part C, your monthly premium should include your Part D coverage costs.
Similar to Part B, if your monthly income exceeds a certain amount, you have to pay a Part D IRMMA. Medicare uses the modified AGI on your IRS return from two years ago, which is the most recent report Social Security gets from the IRS.
You should expect your Part D premium bill to change every year or so. If you have any concerns or issues with your current bill for Part D premium, then contact Social Security to let them know.
Social Security will also notify you regarding any changes to your Part D premium bill, which you are required by law to pay.
How Often Will I Get a Bill?
If you buy Part A or if you owe a Part D IRMAA, then you’ll receive a Medicare Premium Bill (CMS-500) every month.
If you only have Part B, then you’ll only receive your CMS-500 bill every three months. For example, if you receive a bill in April, that bill will be for your May, June, and July coverage.
Medicare Premium Bill (CMS-500) Definition: This is the bill one receives if they pay Medicare premiums Part A, Part B, and Part D.
RELATED: Medicare Frequently Asked Questions
How Do You Pay for Medicare?
1. Medicare Payments Through Mail
You can send Medicare payments via mail to the Medicare Premium Collection Center. You can do this either through a check, money order, credit card, or debit card.
To do this, you have to accomplish the payment coupon that comes with your bill. If you don’t send the payment with the coupon, it won’t be processed.
2. Automatic Electronic Deductions via Medicare Easy Pay
If you’re receiving your Medicare premiums bill from the Centers for Medicare and Medicaid Services (CMS), that means you’re eligible to make Medicare payments via Medicare Easy Pay. If you haven’t, you can also sign up to avail this service
This electronic payment method is free, and automatically deducts your bill from your savings or checking account around the 20th of each month.
3. Pay Medicare via Credit/Debit Card
If you don’t want automatic deductions, you can also pay monthly online via credit or debit card on the MyMedicare website.
4. Medicare Payments Using Your Checking Account or Savings
You can also pay for your Medicare payments by using the online bills payment service of your bank account. However, do note you might have to set things up first with your bank before you can use this method.
Can Medicare Payments Be Deducted Through Social Security Payments?
Yes, this is possible.
- Part A premiums are free as long as you meet the requirements for premium-free Part A.
- Part B premiums are automatically deducted from your monthly Social Security benefits.
- For Part C premiums, you have to contact your plan provider.
- For Part D premiums, you have to contact your drug plan provider to set up automatic Social Security benefits deductions for your premiums. If you want the opposite to happen, then you still have to contact your drug plan, not Social Security.
What Happens with Late Medicare Payments?
Missed Part B Payments
If you pay your Medicare Part B premium late, your second bill will include the total of both your current bill and your previous bill. At this point, you have to pay both of them on or before the 25th of the month.
Otherwise, you’ll receive a Delinquent Bill that sets the due date for the 25th of the next month. If you don’t manage to pay the total amount of the two previous bills, you’ll receive a termination notice and risk losing your Medicare coverage altogether.
You’ll retain your Part B coverage if you manage to pay within 30 days of the termination notice. If you don’t, you’d need to sign up for Part B again.
Missed Part C or D Payments
If you missed a Part C or D payment, your plan will determine how to handle it. However, it’s standard for plan providers to notify about missed payments and provide at least two-months for payment.
Note that providers can’t terminate plans without a warning.
How to Check Your Medicare Bill to See If You’re at Risk of Losing Coverage
Your Medicare bill will tell you if you have late payments and whether or not you’re at risk of losing your Medicare coverage because of it.
There’s a box on the upper-right corner of your bill that indicates what type of bill you have. Here’s how to determine the type of bill:
- “This is not a bill” — This shows that you signed up for Medicare Easy Pay.
- “First bill” — You have no late payments because you either paid your last bill, or this is your first bill.
- “Second bill” — Your Medicare payment didn’t go through by the due date. You will now have to pay the first bill due and the second bill due together.
- “Delinquent bill” — You’ve failed to pay your first and second bill. If you fail to pay the total amount due by the 25th of the month, then you will lose your Medicare coverage.
Other Questions About Medicare Payments, Coverage, Premiums Bills
If you have any other questions, you can direct them to Social Security for Part A and Part B premium issues. For both Part D IRMAA and coverage status issues, contact Medicare.
- Social Security at 1-800-772-1213 (TTY: 1-800-325-0778)
- 1-800-MEDICARE (1-800-633-4227)
All these questions should be able to answer the most critical issues that you have about Medicare payments. Make sure that you pay your bills on time so that you don’t end up racking in more bills.
I hope this guide has helped you learn more about each Medicare part, its coverage, and costs.
Do you have other questions on Medicare payments? Let us know in the comments section below!