While Medicare Part A – which covers hospital care – is free for most enrollees, Part B – which covers doctor visits, diagnostics, and preventive care – charges participants a premium. Those premiums are a burden for many seniors, 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 can enroll during Medicare’s General Enrollment Period (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 percent. 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.
2. Defer income to avoid a premium surcharge
Currently, the standard premium for Medicare Part B is $135.50 per month – but that assumes you’re not a higher earner. Those with higher income levels are subject to higher premium costs, and for the current year, here’s what you’re looking at:
|Medicare premium costs by income level|
|Income level: individual tax filer||Income level: joint tax filer||Total monthly premium|
|Over $85,000 to under $107,000||Over $170,000 to under $214,000||$189.60|
|Over $107,000 to under $133,500||Over $214,000 to under $267,000||$270.90|
|Over $133,500 to under $160,000||Over $267,000 to under $320,000||$352.20|
|Over $160,000 to under $500,000||Over $320,000 to under $750,000||$433.40|
|$500,000 or more||$750,000 or more||$460.50|
If you’re able to 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. For example, your 2018 tax return will determine whether you pay a surcharge in 2020.
3. Pay your premiums directly from your Social Security benefits
Seniors who are enrolled in Medicare and Social Security simultaneously have their Part B premiums deducted directly from their Social Security benefits. Doing so isn’t just a convenience, though; in some cases, it can save you from rising premium costs thanks to Medicare’s hold-harmless provision.
This provision protects you from losing out on Social Security income when Part B premium increases surpass the cost-of-living adjustments that are applied to benefits each year. This means that if Part B increases by $30 a month in a given year, but your cost-of-living adjustment only raises your monthly benefits by $24, you save yourself the extra $6 by not having to pay it.
4. Get help from a Medicare Savings Program
Medicare Savings Programs, or MSPs, are special programs designed to help low-income seniors pay their Medicare expenses – Part B premiums included. Though these programs are federally funded, they’re run at the state level.
To qualify, your monthly income can’t exceed a certain limit. (The exact amount of which will depend on your tax filing status and your state of residence.) Also, your personal resources (such as savings and investments) must fall within a specific limit. But if you’re deemed eligible for assistance via an MSP, you could lower your Part B premium costs.
To apply for one of these programs, you’ll need to visit or call your local Medicaid office.
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.