Medicare Prescription Drug Coverage For Dummies
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You get a choice as to how to pay Medicare premiums in some situations but not in others. The methods in the first two following discussions relate to Part B (and maybe Part A) premiums if you're enrolled in traditional Medicare, followed by your choices if you're in a private Part D drug plan or Medicare Advantage plan.

If your income is under a certain level, you may qualify for

  • A Medicare Savings Program, under which your state would pay your Part B premiums (and also Part A premiums if you need to pay them)

  • The Extra Help program that provides low-cost Part D prescription drug coverage, including waived or reduced drug plan premiums

Call Social Security at 800-772-1213 (or TTY 800-325-0778) for information and/or to apply.

Having Part B premiums deducted from benefit checks

If you receive retirement benefits from Social Security, the Railroad Retirement Board (RRB), or the Civil Service, your Part B premiums are automatically deducted from your monthly payments before you receive them. You have no other option. The same automatic withholding occurs if you receive disability payments from Social Security or the RRB.

Some people's Part B premiums are more than their retirement or disability payments. If that's your situation and you receive benefits from Social Security, your entire benefit is withheld, and you pay the balance directly to Medicare. But if your benefits come from the RRB or the Civil Service, your premium isn't deducted. Instead, Medicare sends you a bill.

Receiving a bill for Part A and Part B premiums

If you're not receiving retirement or disability payments, Medicare will send you a bill for Part B services. (That's provided that you're enrolled in Part B, of course. No enrollment means no bill!)

These bills are due quarterly in advance. But if you prefer not to pay three months' premiums at a time, you can call the Medicare help line at 800-633-4227 (or TTY 877-486-2048) to request an arrangement to pay monthly.

If you don't qualify for premium-free Part A and need to pay premiums to receive Part A services, Medicare will also bill you for payment; however, you must make these payments monthly, not quarterly.

In both situations, you can choose to pay in one of three ways:

  • Mail a check or money order to the address printed on the bill.

  • Pay by credit card, using the bottom portion of the payment coupon sent with the bill.

Sign up for Medicare Easy Pay, a system that allows premiums to be deducted from your checking or savings account each month. To arrange this service, go to the Medicare website.

Paying premiums in a Medicare drug or health plan

Part D prescription drug plans and Medicare Advantage plans generally offer more options to pay any premiums the plans charge (in addition to the Part B premium). Depending on your circumstances and the rules of the plan you're enrolled in, you may be able to choose to pay these plan premiums in one of the following ways:

  • Arranging an automatic deduction from your monthly retirement or disability benefit payment (if you receive one)

  • Mailing a monthly check to the plan

  • Setting up an electronic transfer from a bank account

  • Charging the payment to your credit card by mail, by phone, or online

When you first join a plan, you're asked to choose one of the plan's payment options. (But keep in mind that not all plans offer all the options noted here.) In most cases, you must stay with that method for the rest of the calendar year. If you need to change to another method or you meet any other problems with payments, call the plan to discuss the situation.

If you join a Medicare drug or health plan, or switch to another, and choose to have the premiums deducted from your Social Security, railroad retirement, or Civil Service payments, be aware of the following situations that can arise:

  • It may take two months or more for the deductions to begin. This timeline means that you'll probably get a bill from the plan for those months and will need to pay the plan directly. The plan will tell you when the automatic deduction goes into effect.

  • If you switch to a different plan, the deductions won't automatically continue. When you join a different plan — for example, during open enrollment in the fall or if you move outside your current plan's service area — you need to make a new payment choice. If you again choose deductions from your benefits check, the delay described in the preceding bullet may happen again, and for a time the plan will send you a bill.

  • If you have other insurance that pays part of your Part D drug plan premiums, Social Security still deducts the whole premium amount from your retirement or disability check. Examples include insurance from an employer, union, or State Pharmacy Assistance Program (SPAP). In this situation, the plan, not Social Security, must refund the amount due to you. However, if you prefer to pay premiums to the plan directly instead of having them deducted, you'll be billed only for your share of the premium, and your other insurance will pay its share directly to the plan, too.

If you and your spouse are enrolled in the same private plan (a Part D drug plan or a Medicare Advantage plan) and choose to pay your monthly premiums by check, you may be naturally inclined to put both your payments on a single check. If you go that route, note on the check that the payment is to cover the premiums for both of you for this particular month; for example, write "April premiums for John and Mary Jones" in the memo field. Otherwise, write separate checks. These strategies help you avoid the possibility of one of you being mistakenly disenrolled for nonpayment. It's been known to happen.

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