Getting Help to Pay Medicare Premiums
Depending on the type(s) of Medicare you have, you may pay multiple premiums each month. These costs can add up, especially if you’re dealing with limited income, emerging health issues, or other life events. Six steps can help you navigate Medicare costs and keep costs under control:
- Step 1: Understand how premiums work for different Medicare types
- Step 2: Explore your options to help pay for Medicare premiums and other costs
- Step 3: Discover the role of Medicare Extra Help
- Step 4: Evaluate specialized Medicare Plan options
- Step 5: Consider non-Medicare options
- Step 6: Apply for help paying Medicare premiums
Read on to learn how you can make Medicare more affordable and ensure you have the coverage you need.
Table of Contents
Understanding Medicare Premiums
A Medicare premium is the amount you pay each month for healthcare coverage. Unlike a deductible, which you pay before your coverage kicks in, your premium is due each month to keep your coverage active.
Each type of Medicare comes with its own premium. These premiums are affected by factors such as your age, your income, and how much you paid in Medicare taxes while working. There may also be permanent premium penalties if you fail to sign up for Medicare Part A and B during your initial eligibility period.
Here’s a look at how premiums work for Medicare Parts A, B, C, and D, along with Medigap.
|Medicare Part||2023 Premium Cost|
|Part A||$0 for most people; may be $278 or $506 per month for some|
|Part B||$164.90 per month; may be higher depending on income|
|Part C, or Medicare Advantage||$18 average monthly premium per projected CMS data (in addition to Part A and B premiums)|
|Part D, or Prescription Drug Coverage||Varies by plan type and income, monthly average is projected to be $43|
|Medigap||Set by your Medigap insurance provider|
If you get Medicare Part A before you turn 65, your Part A premium is $0. If you get Part A after you turn 65, your premium may be $0 as long as you or your spouse paid enough Medicare taxes during the course of your employment, equating to approximately ten years of work.
If you do not qualify for premium-free Part A, you may be able to purchase it. In this case, you pay either $278 or $506 per month based on how much you have paid in Medicare taxes. You must enroll in Part B to purchase Part A, and if you opt out of buying Part A when you are first eligible, you may pay a penalty, which is a 10% premium increase that lasts twice the number of years that you didn’t sign up.
The Part B premium starts at $164.90 monthly but increases based on your income. This amount may change each year, and you pay this premium even if you are not currently receiving any Part B services. Like Part A, you may pay a permanent premium penalty of 10% if you do not sign up for Part B when you are first eligible. This penalty also increases each year — if you wait one year after you are eligible, your penalty is 10%. Wait two years, and it’s 20%. After three years, it’s 30%, and so on. Unlike the Part A penalty, this one is permanent.
Part C, or Medicare Advantage
Medicare Part C, also called Medicare Advantage, is healthcare coverage provided by a private insurance company that combines Part A and Part B. These insurance companies are approved by Medicare to offer healthcare coverage and are allotted a set amount of money per patient.
Part C premiums are set by insurance companies and are based on factors such as your age, current health, and the type of plan purchased — for example, some Part C plans may also include Part D drug coverage. According to CMS data projections, the average premium cost for Medicare Advantage plans in 2023 is $18 per month. This is in addition to your Part B premium and any applicable Part A premium.
Part D, or Prescription Drug Coverage
The premium cost of Part D varies according to the coverage amount offered and the types of drugs covered. Part D is available as an add-on to Part A and B coverage or may be bundled with Part C plans. Income also plays a role in Part D premiums. For example, if your income as a single filer is $97,000 or less, you pay the plan premium. If your income is from $97,000 to $123,000, meanwhile, you pay $12.20 per month plus the basic premium.
Medigap, or Medicare Supplement
Medigap, also known as Medicare Supplement, is additional coverage you can purchase through a private insurance company that helps extend the coverage offered under Part A or Part B. For example, Medigap Plan A covers Part B coinsurance or copayments and Part A hospice care coinsurance or copayments.
Premiums for Medigap plans are set by the insurance company. They are priced — or “rated” — in one of three ways. First are community-rated policies. In this case, everyone who purchases the Medigap policy pays the same premium, regardless of age.
Next are issue-age-rated policies. In this case, premiums are based on your age when you enter the plan but don’t change based on age after that. This means you pay less the earlier you enroll in the plan, and your premiums won’t go up because of your age (though they can go up for other reasons). Finally, there are attained-age-rated plans. Premiums for these plans are based on your current age and increase as you age.
Other Medicare Costs to Consider
Along with premiums, there are also other Medicare costs to consider. They include:
- Deductibles: Your deductible is the amount you pay before your insurance starts to pay. If you have a deductible of $200, you pay this amount out-of-pocket before you claim any services through your plan.
- Copayments: Copayments are fixed costs that you pay for each healthcare service. For example, you might have a copayment of $30 for every doctor’s appointment. These copayments don’t count toward your deductible.
- Coinsurance: Coinsurance is represented as a percentage. If your coinsurance is 80/20, your plan pays 80% of covered healthcare costs, and you pay 20%. This is only applied after your deductible is met.
- Out-of-network fees: You may also be charged additional fees for service if you get care outside your network under a Medicare Advantage plan such as an HMO.
- Out-of-pocket maximums: Out-of-pocket maximums represent the most you can pay for covered services in a year. In 2023, this limit is $8,300 for in-network services and $12,450 for in- and out-of-network services combined. Deductibles, copayments, and coinsurance all count toward the out-of-pocket maximum.
It’s worth noting that out-of-pocket maximums don’t apply to Original Medicare. This means there is no cap on the amount you pay each year for coverage.
Your Options to Help Pay Medicare Premiums and Other Costs
With multiple Medicare Parts and Medigap Plan types, you may find yourself struggling to cover premium costs along with expenses tied to deductibles, copayments, and other fees. Thankfully, there are options available to help you pay Medicare premiums and other costs.
Medicare Savings Programs (MSPs)
Also called Medicare Premium Payment (MPP) programs, there are four types of MSPs that can help cover your premium costs if you qualify:
- The Qualified Medicare Beneficiary Program
- The Specified Low-Income Medicare Beneficiary Program
- The Qualified Individual Program
- The Qualified Disabled Working Individual.
Here’s a look at how each type works and what’s required to qualify.
Qualified Medicare Beneficiary Program (QMB)
The QMB helps pay for Part A and Part B premiums along with deductibles, coinsurance, and copayments for services that Medicare covers. Under the QMB, Medicare providers are not allowed to bill you for services covered, but you may still pay a small Medicaid copayment for medications if you also have Medicaid.
To be eligible for a QMB, individuals must have a monthly income of $1,235 or less and resources (including money in bank accounts, stocks, and bonds) totaling no more than $9,090 or less. For married couples, these numbers are $1,663 and $13,630.
Specified Low-income Medicare Beneficiary (SLMB) Program
The SLMB helps pay for your Part B premiums and also includes Extra Help paying for prescription drugs. Under an SLMB, you pay no more than $10.35 for each drug your plan covers.
To be eligible for the SLMB program, you must have Part A and Part B Medicare. Individual income and resource limits are $1,478 and $9,090, while those for married couples are $1,992 and $13,630.
Qualified Individual (QI) Program
The QI program also helps pay for Part B premiums but isn’t available if you qualify for Medicaid. In addition, you’re required to reapply for the QI program every year, and states operate on a first-come, first-served basis.
To qualify for this program, you must have Part A and Part B Medicare. Income and resource limits for individuals are $1,660 and $9,090, respectively, while for married couples, they are $2,239 and $13,630.
Qualified Disabled Working Individual (QDWI) Program
The QDWI program helps pay for Part A premiums.
Three conditions can make you eligible for the QDWI program. First, you must have a disability. Second, you must currently be working. Or third, you must have your Social Security disability benefits and Medicare premium-free Part A when you return to work.
In addition, individuals must have a monthly income of no more than $4,945 and resources totaling no more than $4,000. For married couples, these numbers are $6,659 and $6,000.
For all 4 MSP types, states make the final decision about who is eligible.
Some states don’t count specific resources and income when calculating eligibility, while others — such as Alaska and Hawaii — have slightly higher limits for income and resources. As a result, it’s worth contacting your state to see if you are eligible.
Medicare Extra Help
Medicare Extra Help reduces the cost of Part D drug coverage by covering costs such as deductibles and copayments. You can apply for Medicare Extra Help before or after you enroll in Part D.
There are two types of Extra Help: Full and Partial. Full Extra help means you pay no plan deductible or premium, and you pay up to $4.15 for generic and $10.35 for brand-name drugs. Once your total costs (what you and your plan pay) reach $7,400, you pay $0 for prescription drugs.
Partial Extra Help means that your premium varies based on income, and your deductible is no more than $104. You pay no more than 15% of the cost for each covered drug until the total costs for you and the plan reach $7,400, after which you pay $4.15 for each generic and $10.35 for each brand-name drug.
You are automatically enrolled in Medicare Extra Help if you have full Medicaid coverage, have help from your state government in paying Part B premiums, or receive Supplemental Security Income (SSI) from Social Security.
For individuals, Extra Help income and resource limits are $21,870 and $16,600. For married couples, they are $29,580 and $33,240.
Specialized Medicare Plans
You may also be able to access specialized Medicare plans to help offset the costs of coverage. These Special Needs Plans (SNPs) fall into one of three categories: Chronic Condition SNPs (C-SNPs), Institutional SNPs (I-SNPs), and Dual Eligible SNPs (D-SNPs). These Medicare Advantage plans bundle all of your Part A, Part B, and Part D services under a single provider to help you manage costs.
Medicare Special Needs Plans
C-SNPs and I-SNPs are limited to those with specific conditions or characteristics, and their plan offerings are designed to meet the needs of those groups. The availability of these plans is based on where insurers choose to operate — not all plan types are available in all locations.
To be eligible for a C-SNP plan, you must have one or more severe or disabling chronic conditions, including cancer, heart failure, dementia, or end-stage liver disease. To qualify for an I-SNP plan, you must either live in the community but need facility-level care, or live for at least 90 straight days in a nursing home, skilled nursing facility, or similar healthcare facility.
Medicare and Medicaid Dual-Eligible Special Needs Plans
D-SNP plans coordinate benefits across both Medicare and Medicare to create coverage tailored to your individual needs. They also help manage the complexity and cost of both Medicare and Medicaid benefits.
To qualify for a D-SNP plan, you must be eligible for both Medicare and Medicaid.
There are also non-Medicare options to help offset the cost of coverage, including Programs of All-inclusive Care for the Elderly (PACE) and Life Insurance Living Benefits.
PACE coordinates healthcare services to help elderly patients stay in the community rather than moving to institutionalized care. To qualify for PACE, you must be 55 or older, live in a PACE service area, and require a nursing-home level of care but be able to live in the community with PACE help.
If you have Medicaid, you don’t pay a monthly premium for long-term care. If you have Medicare but not Medicaid, you’ll pay a monthly premium for long-term care and for Part D drugs.
Life Insurance Living Benefits
Life insurance with living benefits, also called an accelerated death benefit rider, allows you to use a portion of your life insurance death benefit to help cover healthcare costs if you are diagnosed with a critical, chronic, or terminal illness.
How to Apply for Help Paying Medicare Premiums
If you’re looking for help with your Medicare premiums, start by applying to the plan or program that best meets your needs. Here’s how to get started with each type.
How to Apply for Medicare Savings Programs
To apply for Medicare Savings Programs, contact your state. Each state has its own requirements, but in general, you’ll need to provide proof of income and resources. In some cases — such as applications for the QDWI program — you may also need to show proof of your disability and the loss of your Social Security benefits.
How to Apply for Medicare Extra Help
You can apply for the Medicare Extra Help program online at SSA.gov. To apply, you’ll need documents, including your bank statements and tax returns, IRA and 401(k) balances, and statements of any pensions, veterans’ benefits, or annuities.
How to Get a Specialized Medicare Plan
To get a Specialized Medicare Plan, contact the plan provider for a paper application, join online through the provider website, call the provider directly, or call Medicare at 1-800-MEDICARE. If you have both Medicare and Medicaid and are applying for a D-SNP plan, you may be able to apply through the Online Enrollment Center.
Putting It All Together
Premiums and other Medicare costs can add up, but options are available to help manage costs. Depending on your current healthcare needs, income, and resource availability, you may qualify for Medicare Savings Programs, Medicare Extra Help, or Specialized Medicare Plans.