What is the Medicare Part B premium and why did mine change?
How the Part B premium is set, the four things that make yours different from your neighbor's, and what to do when it jumps.
The Part B premium is the one Medicare cost nearly everybody pays every month. It is set federally, it resets every January, and yet two people on the same street can pay very different amounts. Here is why.
How it is set
Congress designed Part B so that enrollee premiums cover roughly a quarter of the program's cost, with general revenue covering the rest. Each fall CMS announces the standard premium and deductible for the coming year based on projected program spending.
For most people it is deducted directly from the Social Security check, so you never write a check and never really see it. If you are not yet drawing Social Security, Medicare bills you quarterly instead.
Four reasons yours differs
- IRMAA. Higher income means a surcharge on top of the standard premium, based on your tax return from two years earlier. See how IRMAA works and how to appeal it.
- The hold harmless provision. If you have your premium deducted from Social Security, your premium increase generally cannot exceed your Social Security cost of living increase in dollar terms. In a year with a small COLA, some people pay less than the standard amount.
- Late enrollment penalty. Ten percent added for each full 12 months you could have had Part B and did not, permanently.
- Assistance programs. A Medicare Savings Program can pay your Part B premium outright.
Why it went up this year
Work through it in this order.
- Compare your amount to the standard premium for the new year. If they match, it simply rose with the program.
- If you are above standard, look for an IRMAA determination letter. Check which tax year it used.
- If you were held harmless in a prior year, your premium can catch up to the standard amount in a year with a larger COLA, which feels like a jump even though nothing about you changed.
- If you enrolled late, part of what you pay is penalty rather than premium.
The most common cause of a surprise increase is IRMAA from a two year old return, and the most common cause of that is a one time event like selling property. If your income has since dropped for a qualifying reason such as retirement, form SSA-44 can remove it.
Getting it paid for you
Medicare Savings Programs cover the Part B premium for people under certain income and asset limits, and the limits are higher than most people assume.
- QMB pays the premium plus deductibles and coinsurance
- SLMB and QI pay the premium
- Qualifying also opens the door to Extra Help on prescriptions
Because the premium normally comes out of your Social Security check, having it paid means a larger deposit every month. In Texas you apply through Health and Human Services, not Social Security. See how the two programs work together.
Where to find the current number
The standard premium, the deductible and the IRMAA brackets are all reset each January and announced the preceding fall. Rather than print figures here that go stale within months, check Medicare.gov for the current year, or call and we will look up your specific situation.
For everything else with a price tag, see the full cost breakdown.
Common follow-up questions
Can I pay my Part B premium myself instead of having it deducted?
If you are drawing Social Security it is deducted automatically. If you are not, Medicare bills you quarterly and you can pay online, by mail or through Medicare Easy Pay.
Why is my premium different from my neighbor's?
Almost always IRMAA, the hold harmless provision, or a late enrollment penalty. Those three explain nearly every difference.
Does everyone pay a Part B premium?
Nearly everyone. The exceptions are people whose premium is paid by a Medicare Savings Program or by Medicaid.
Want this looked at properly?
We are an independent agency in McAllen serving Hidalgo, Cameron and Starr counties. No cost to talk it through.
Call (956) 687-3334Read next
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