To help you understand the potential costs, we’ll go through the different Medicare components and look at how much of each one’s costs you’ll be expected to cover yourself. We’ll also discuss whether these Medicare expenses come out of your Social Security check, or if you can pay for this coverage in a different way.
Who Is Eligible for Medicare?
Medicare is a social insurance program available to U.S. citizens and permanent residents 65 years of age or older. It’s also available to some younger Americans who are disabled or diagnosed with End-Stage Renal Disease (ESRD). While everyone who is eligible can get Medicare when they turn 65, not everyone qualifies for premium-free Medicare. To get Medicare Part A benefits without paying a premium, you must also:
Be eligible for or currently receive Social Security or Railroad Retirement Board benefits Have worked and paid FICA taxes for a specified number of quarters of coverage (QCs)
The number of quarters you must work to qualify for premium-free Part A varies based on your age and health conditions. For people who qualify by turning 65, it’s 40 QCs, which are typically earned in 10 years of work; people with disabilities accrue credits slightly differently based on when their disability began. If you don’t have enough QCs, you can choose to purchase Medicare Part A coverage for an amount based on how many quarters you’ve worked.
When Do You Have To Pay for Medicare?
If you don’t qualify for premium-free Part A coverage, you’ll need to pay a monthly premium. You’ll also have to pay a premium if you sign up for Part B, which is optional. If you receive Social Security benefits, you’ll have these premiums automatically deducted from your checks. Medicare will bill you directly if you aren’t collecting Social Security. If you sign up for Parts C and D, you’ll also need to pay premiums for those plans. If you receive Social Security benefits, you can request that the premiums be deducted from your checks, but this won’t happen automatically. If you don’t receive benefits, you’ll get a bill from Medicare for Part D and from the insurer for Part C.
Medicare Costs You Can Deduct From Social Security
Most people who receive Social Security benefits will have their Medicare premiums automatically deducted. Here’s a closer look at what costs you can expect to see taken out of your checks.
Medicare Part A
Medicare Part A covers hospital stays, skilled-nursing-facility care, hospice care, and home health visits. If you worked and paid Medicare taxes for at least 10 years, or 40 QCs, you’ll typically qualify for premium-free Part A. If you didn’t, you could choose to pay for Part A coverage. The amount you’ll pay depends on how many QCs you worked. In 2022, here’s what you’ll pay for Medicare Part A based on how many QCs you’ve earned:
30 to 39 QCs: $274 a monthLess than 30 quarters: $499 a month
If you don’t have enough QCs to qualify for premium-free Part A coverage, you typically won’t have enough Social Security credits to qualify for monthly benefits your premium can be deducted from, so you’ll get a bill from Medicare each month.
Medicare Part B
Medicare Part B is medical insurance coverage that helps pay for doctors’ services, ambulance services, outpatient mental-health care, and some medical supplies. Part B also covers preventive services such as screenings, wellness visits, and flu shots. Unlike Part A, Medicare Part B coverage requires everyone to pay a monthly premium. The standard Part B premium in 2022 is $170.10 a month. However, your premium amount depends on your modified adjusted gross income from two years ago, as well as whether you signed up during your initial enrollment period; if you didn’t, you may need to pay a late penalty. Here’s how much you can expect to pay for Medicare Part B in 2022 depending on your 2020 income and tax filing status.
Medicare Part C
Medicare Part C is now known as a Medicare Advantage Plan, and it allows you to get your health care services through a private insurance company. This type of Medicare combines the benefits and services from Parts A and B plus prescription drug coverage. Some plans also offer vision, dental, and hearing benefits. With Medicare Advantage, you may still need to pay monthly premiums for Part B, unless your Advantage plan covers this cost. In addition, you’ll pay the Advantage plan’s monthly premium, if it has one. The exact amount you’ll need to pay for your Medicare Advantage coverage varies from plan to plan, although many plans offer a $0 premium. To learn more about the Advantage plans available where you live, you can compare options on the Medicare website. The national average premium for 2022 is $19 a month. Since Medicare Advantage plans are provided by insurance companies and not directly through Medicare, their premiums aren’t automatically deducted from your Social Security benefits. However, you can contact your insurer and request to have the premiums deducted from your benefits check, which may require you fill out some paperwork and pay out of pocket for a few months while it’s processed. If you prefer, you can choose to receive a bill from your insurer each month.
Medicare Part D
Medicare Part D helps you pay for prescription drugs. Most people pay only the standard Medicare Part D premium for this coverage. In 2022, the average premium for Part D is $33 a month. However, if your income is higher, you may need to pay an additional amount known as Part D-IRMAA. If you need to pay this higher amount, the Social Security Administration will contact you. Here’s how much you can expect to pay in 2022 for Part D-IRMAA, based on your 2020 income: Your Part D premium isn’t automatically deducted from your Social Security check. Instead, you’ll get a bill in the mail. If you’d prefer to have the premium taken out of your Social Security benefits, you must contact your plan’s administrators.
Medigap Coverage
A Medigap insurance plan is a kind of private insurance that helps you pay for some of your health care costs that Medicare doesn’t cover, which can include your Part A coinsurance and your Part B copayments, among other items. Some plans also provide coverage for when you travel out of the country, which Medicare Parts A and B don’t cover. If you want this coverage, you need to purchase it through an insurance company. You must have Medicare Parts A and B to qualify for Medigap. Medigap costs vary widely from company to company. To pick the best one for your needs, compare which items are covered by each plan. Once you’ve narrowed down your options, check the prices of Medigap plans with different insurance companies in your area. Once you’re approved for Medigap coverage, you’ll need to pay for your policy. This amount isn’t automatically deducted from your Social Security check, so you’ll need to pay the insurer directly.
Can You Change How You Pay for Medicare?
If you have Social Security benefits, your Part B premiums will be automatically deducted from them. If you don’t qualify for Social Security benefits, you’ll get a bill from Medicare that you’ll need to pay via:
Your online Medicare account Medicare Easy Pay, a tool that lets you automatically transfer monthly payments Online bill pay through your bank account Check, money order, or credit card payment
If you are having trouble paying your bill, you can contact someone at Medicare for help. Medicare Advantage and Part D premiums aren’t automatically deducted from your Social Security benefits, so you’ll typically receive a bill and pay the insurer directly. If you’d prefer to have your premiums for these plans deducted from your benefits check, you can contact your insurer to request this change.