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Four ways to save money on your Medicare Part B premiums

Delaying enrollment in Medicare – when you're eligible for it – could result in a penalty that will remain in effect for the rest of your life.

Maurie Backman | March 15, 2024

While Medicare Part A – which covers hospital care – is free for most enrollees, Medicare Part B – which covers doctor visits, diagnostics, and preventive care – charges beneficiaries a premium. Those premiums can be a burden for many people, but here’s how you can pay less for them.

1. Sign up for Part B on time

Your initial window to enroll in Medicare begins three months before the month of your 65th birthday, and ends three months after that month. If you don’t sign up during that seven-month period, you have another annual opportunity to enroll during Medicare’s General Enrollment Period, which runs from January 1 through March 31 each year.

But for each 12-month period you go without Medicare coverage despite being eligible, you’ll be hit with a penalty that raises your Part B premium cost by 10%. Worse yet, that penalty will remain in effect for the rest of your life. The takeaway? If you want to save money, don’t be late. (You can safely delay Part B, without a penalty, if you’re covered under a current employer’s plan.)

2. Structure your income to avoid a premium surcharge

The standard premium for Medicare Part B is $174.70/month in 2024.1 But that assumes you’re not a higher earner. Those with higher income levels are subject to higher premium costs. For 2024 (based on your income in 2022, which is the most recent tax return that was filed before the 2024 plan year began) here’s what you’ll pay for Part B if your income falls into the level that triggers a surcharge:1

2024 Medicare Part B premium costs by income level
Income level: individual tax filer Income level: joint tax filer Total monthly premium
Over $103,000 to under $129,000 Over $206,000 up to $258,000 $244.60
Over $129,000 up to $161,000 Over $258,000 up to $322,000 $349.40
Over $161,000 up to $193,000 Over $322,000 up to $386,000 $454.20
Over $193,000 and less than $500,000 Over $386,000 and less than $750,000 $559.00
$500,000 and above $750,000 and above $594.00

If you can defer income strategically to future tax years so that you can report a lower total on your tax return, you might save yourself a higher premium charge for at least a year, since those surcharges are based on previous tax returns (be sure to discuss this with your tax advisor, since there are numerous other factors to take into consideration besides your Medicare Part B premiums). And if you experience a life change that reduces your income, you can appeal the income-related surcharge.

3. How the ‘hold harmless’ provision protects enrollees

If a Medicare beneficiary is receiving Social Security retirement benefits, their Medicare Part B premiums are deducted directly from their Social Security check. This isn’t just a convenience, though; in some cases, it can save you from rising premium costs thanks to Medicare’s hold-harmless provision.

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This provision (which kicked in for many beneficiaries in 2016 and 2017) protects you from losing out on Social Security income when Part B premium increases surpass the cost-of-living adjustments (COLA) that are applied to Social Security benefits each year. This means that if Part B increases by $30 a month in a given year, but your COLA only raises your monthly benefits by $24, you save yourself the extra $6 by not having to pay it. (Note that this protection is not applicable if you’re paying a high-income surcharge for your Part B coverage, described above.)

In recent years, the COLA has been more than adequate to cover the full cost of the standard Part B increases, so the “hold harmless” provision hasn’t been applicable. But it’s always there, just in case the Part B premium increase is more than a beneficiary’s COLA for a given year.

It’s important to note that Part B premiums are automatically deducted from Social Security benefits for all beneficiaries who are receiving Social Security. But some people who are fairly new to Medicare have delayed their Social Security benefits. There are a variety of reasons to delay Social Security benefits, and each person needs to make the choice that best matches their needs. But once you’re receiving benefits from both Medicare and Social Security, the “hold harmless” provision will continue to protect you if and when there’s a year when the COLA is smaller than the standard Part B premium increase.

4. Get help from a Medicare Savings Program

Medicare Savings Programs, or MSPs, are special programs designed to help low-income seniors pay various Medicare expenses, including Part B premiums. These programs are funded via Medicaid, so they’re run at the state level (each state has its own Medicaid program, which is jointly funded by the state and federal government).

There are both income and asset/resource limits to qualify for each MSP. The federal government sets minimum requirements for these eligibility parameters, which are adjusted annually.2 But states can set higher income and/or asset limits, so it’s important to check with your state to see if you might qualify for an MSP.

To apply for one of these programs, you’ll need to visit or call your local Medicaid office. You can do this at any time of the year.

5. See if you can get Medicare Part B premium-free

There are three ways that enrollees can get Part B for free, though they aren’t applicable to most Medicare beneficiaries:

  • Eligibility for a Medicare Savings Program that covers the cost of Part B.
  • Employer reimbursement of Part B premiums through a QSEHRA or an ICHRA.
  • Enrollment in a Medicare Advantage plan that has a “giveback” rebate that covers the entire Part B premium.

Read more about how enrollees can get Medicare Part B free.

Maurie Backman has been writing professionally for well over a decade, and her coverage area runs the gamut from healthcare to personal finance to career advice. Much of her writing these days revolves around retirement and its various components and challenges, including healthcare, Medicare, Social Security, and money management.

  1. 2024 Medicare Parts A & B Premiums and Deductibles” Centers for Medicare & Medicaid Services. October 12, 2023.  
  2. Medicare Savings Programs” Accessed March 15, 2024. 
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