What is the Medicare Part B premium and why did mine change?
The Part B premium is the monthly bill for doctor coverage. It resets every January, and your income, a late penalty or a Social Security rule can make yours differ.
- The Part B premium is the monthly bill for the part of Medicare that pays for doctor visits, and nearly everyone on Medicare pays it.
- Each fall the government sets a standard amount for the coming year, and yours can be higher because of your income from two years ago.
- Signing up late adds 10 percent for each full year you could have had Part B and did not, and that stays for good.
The Part B premium is the monthly bill for Part B, the part of Medicare that pays for doctor visits and outpatient care. Nearly everyone on Medicare pays it. The federal government sets it, it resets every January, and two people on the same street can pay very different amounts. It is also the reason Medicare has a monthly cost even when Part A, the hospital part, has no premium.
How the Part B premium is set each year
Congress set up Part B so that the premiums people pay cover about a quarter of the program's cost. General tax revenue covers the rest. Each fall the Centers for Medicare and Medicaid Services (CMS) announces the standard premium and the deductible, the amount you pay yourself before Part B starts paying, for the coming year. The figures are based on what the program expects to spend.
For most people the premium comes straight out of the Social Security check, so you never write a check and may never notice it. If you are not yet drawing Social Security, Medicare bills you every three months instead.
Four reasons yours differs from the standard amount
- Income. If your income is above a set level, you pay a surcharge called the Income Related Monthly Adjustment Amount (IRMAA). It is based on your tax return from two years earlier. See how IRMAA works and how to appeal it.
- The hold harmless rule. If your premium comes out of your Social Security check, the dollar increase in your premium generally cannot be more than the dollar increase in your Social Security cost of living adjustment (COLA). In a year with a small COLA, some people pay less than the standard amount.
- A late enrollment penalty. Ten percent is added for each full 12 months you could have had Part B and did not, and it stays for good. Two full years late means 20 percent more every month.
- Help paying it. A Medicare Savings Program, a state program for people with limited income, can pay your Part B premium in full.
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 went up with the program.
- If you are above the standard amount, look for an IRMAA letter. Check which tax year it used.
- If you were held harmless in an earlier year, your premium can catch up to the standard amount in a year with a bigger COLA. That feels like a jump even though nothing about you changed.
- If you signed up late, part of what you pay is penalty, not premium.
The most common cause of a surprise increase is IRMAA based on a tax return from two years ago, and the most common cause of that is a one time event like selling property. If your income has dropped since then for a qualifying reason, such as retirement, form SSA-44 can remove the surcharge.
Programs that pay the Part B premium for you
Medicare Savings Programs pay the Part B premium for people under certain income and asset limits. The limits are higher than most people assume.
- The Qualified Medicare Beneficiary program (QMB) pays the premium plus deductibles and coinsurance, the percentage of a bill you normally pay yourself
- The Specified Low Income Medicare Beneficiary (SLMB) and Qualifying Individual (QI) programs pay the premium
- Qualifying also opens the door to Extra Help, the program that lowers prescription costs
Because the premium normally comes out of your Social Security check, having it paid means a bigger 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 income levels all reset each January and are announced the fall before. Figures printed here would go stale within months, so check Medicare.gov for the current year, or call and we will look up your situation.
For everything else with a price tag, see the full cost breakdown.
Find this year's standard amount, compare it to your own, and read any letter from Social Security about your premium. If your income has dropped since the tax year they used, ask about form SSA-44. To have us walk through your letter with you, call the office or enter your ZIP code in the form on this page.
Common follow-up questions
Can I pay my Part B premium myself instead of having it deducted?
If you are drawing Social Security, it comes out of the check automatically. If you are not, Medicare bills you every three months. You can pay online, by mail, or through Medicare Easy Pay.
Why is my premium different from my neighbor's?
Almost always it is IRMAA, the hold harmless rule, 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. There is no obligation to talk it through.
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Gerino Alejos
Licensed insurance agent · License 3128710 · NPN 18243381
Owner of McAllen Insurance Group, an independent agency on North 10th Street in McAllen. Works with clients across Hidalgo, Cameron and Starr counties on Medicare, Marketplace health, life and auto coverage. Se habla español.