Q. What choices do I have in the way I pay my Medicare premiums?
It depends on which premiums you mean, as there are different requirements for Part A (hospital insurance), Part B (doctor visits and other outpatient services), and for Medicare’s private health plans or Part D prescription drug plans.
Part A: Most people don’t pay any premiums for Part A because they paid Medicare payroll taxes when they worked. People who don’t have enough Social Security work credits to quality for Medicare (as explained here) may be able to buy into Part A by paying a premium. In this case, Medicare sends you a bill and you pay directly by check to the Medicare Premium Collection Center at the address given on the bill.
Part B: If you receive retirement benefits from Social Security, the Railroad Retirement Board or the civil service, your Part B premiums are automatically deducted from your monthly payments—there’s no other option. But if you don’t get any of those benefits, Medicare will send quarterly bills. If paying three months of premiums at a time causes hardship, call Medicare’s help line at 1-800-633-4227 to request an arrangement to pay monthly.
Medicare’s private health and drug plans: These generally offer more options. Depending on your circumstances and the rules of the plan you’re enrolled in, you may be able to pay your premiums by:
- automatic deduction from your Social Security monthly benefit payment (if you receive one)
- mailing a monthly check to the plan
- arranging an electronic transfer from a bank account
- charging the payment to your credit or debit card (though not all plans offer this option)
When you first join a plan, you’re asked to choose one of the payment methods. In most cases, you must stay with that option for the rest of the calendar year. If you need to change to another method, or meet any other problems with payments, call the plan to discuss the situation.
Things to consider
If you join a Medicare health or drug plan, or switch to another, and choose to have the premiums deducted from your Social Security check, be aware of the following situations that can arise:
- It may take two months or more for the deductions to begin. This means that the number of premiums owed from the time you joined the plan will be taken out of one month’s check.
- If you switch to another health or drug plan (for example, during the annual open enrollment period or if you move outside your current plan’s service area), the deductions will not automatically continue. When you join a different plan, you need to make a new payment choice. If you again choose deductions from your Social Security check, the delay described above happens again.
- If you switch to a different plan, Social Security may continue deducting the premiums from your old plan from your check for a couple of months or so. Social Security will refund the payments to you directly.
- If you have other coverage (for example, from an employer, union or state pharmacy assistance program) that pays part of your premium, Social Security still deducts the whole premium amount from your check. It is the plan, not Social Security, that must refund the amount due to you. However, if you prefer to pay the plan directly, instead of having Social Security deduct your premiums, you’d be billed only for your share and your other coverage would pay its share directly to the plan, too.
For more information, see the Medicare publication “Withholding Premiums From Your Social Security Payment.”
Remember that if your income is now very limited, you may qualify to have your Medicare Part B premiums paid by your state under one of the long-standing Medicare Savings Programs. For more information and how to apply, see the official publication online. If you qualify for one of those programs, you’re also automatically entitled to low-cost Extra Help benefits under the Medicare Part D prescription drug program.
Patricia Barry is a senior editor at the AARP Bulletin.