(Medical/Doctor Insurance) covers certain doctors’ office visits, blood tests, X-rays, diabetic screenings, outpatient care, medical supplies, specialists, and preventive services.
Most retirees don’t pay a monthly premium for Medicare Part A hospital insurance. However, there is a monthly premium you must pay for Medicare Part B medical insurance of $104.90 per month, typically deducted from your monthly social security check. Retirees who earn more than $85,000 ($170,000 for couples) may pay higher premiums.
Additionally, there is a one time out of pocket deductible of $147 per year. So if you need to see a primary care physician, specialist, or require any Medicare services covered under Part B, you’ll end up paying the $147 deductible annually, and any co-insurance and co-payments are in addition to the annual deductible. Some Medicare Supplement (Medigap) insurance plans will pay this deductible for you.
If your modified adjusted gross income as reported on your IRS tax return from 2 years ago (the most recent tax return information provided to Social Security by the IRS; see chart below) is above a certain amount, you may pay more.
The amount you pay can change each year depending on your income. If you have to pay a higher amount for your Part B premium and you disagree (for example, you experience lower income), contact Social Security.
When you first apply for Medicare Part B, your options for how and when the $104.90 is deducted from your social security check will be explained to you by your social security representative.
Here is a chart to help explain how much you can expect to pay for your monthly Part B premium.
Part B premiums by income
|If your yearly income in 2013 (for what you pay in 2015) was|
|File individual tax return||File joint tax return||File married & separate tax return||You pay|
|$85,000 or less||$170,000 or less||$85,000 or less||$104.90|
up to $107,000
up to $214,000
up to $160,000
up to $320,000
up to $214,000
up to $428,000
|above $85,000 and up to $129,000||$272.70|
|above $214,000||above $428,000||above $129,000||$335.70|
Employer health coverage
If you or your spouse is employed and covered by a group health plan at work, you must sign up within eight months of leaving the job or the coverage ending to avoid higher premiums.
During this eight month period you can apply for a Medigap plan. You cannot be denied coverage, no matter what your health status is during this enrollment period. If you do not enroll in a Medigap plan during this enrollment period, there is no guarantee a plan will accept you and offer you a supplemental plan.
What Part B covers
Medicare Part B covers health care services (such as your lab tests, surgeries, and doctor visits), and supplies like oxygen, wheelchairs, and walkers which are considered medically necessary to treat a disease, illness, symptoms, or condition.
A Medicare Advantage Plan or other Medicare plan may have different regulations, but your plan must provide at least the same coverage as Original Medicare. Some services may be limited to certain circumstances or for patients with certain conditions.
Ways to Pay Part B Premiums
When you sign up for Part B, you’ll get a monthly bill called a “Notice of Medicare Premium Payment Due”. To pay these bills you can:
- Sign up for Medicare Easy Pay, a free service that automatically deducts your premium payments from your savings or checking account each month.
- Mail your Medicare premium check or money order payments to:Medicare Premium Collection Center
P.O. Box 790355
St. Louis, MO 63179-0355
- Pay by credit card. Complete the payment coupon at the bottom portion on your Medicare bill and mail it to the address above.
If you get a bill from the RRB mail your premium payments to:
RRB, Medicare Premium Payments
P.O. Box 979024
St. Louis, MO 63197-9000
If you are a Civil Service retiree and NOT entitled to Social Security you may have your premiums deducted from your Civil Service annuity. Just send an email to OPMMailbox@cms.hhs.gov.
Part B Late Enrollment Penalty
The government demands that if you don’t sign up for Part B when you’re first eligible, or if you drop Part B and then get it later, you may have to pay a late enrollment penalty for as long as you have Medicare. Your Part B monthly premium may increase 10% for each 12-month period that you could have had Part B but did not sign up for it.
If you meet certain conditions that allow you to sign up for Part B during a Special Enrollment Period, usually, you don’t pay a late enrollment penalty.
How to Disenroll from Part B
Suppose you want to disenroll from Medicare Part B because your employer’s (or your spouse’s employer’s) insurance is primary to Medicare and you don’t want to pay the Medicare premiums. Submit form CMS-1763 that was completed during a personal interview with a Social Security representative. You can call 800-772-1213 to speak with the Social Security Administration, or visit your local office.
To re-sign up for Part B without penalty
As long as you sign up for Part B within eight months of retiring (or otherwise stopping work), you will not incur a late penalty.
Job Loss Special Enrollment Period
If you lose your job, or your spouse losses their job and you were covered for Medicare part B through either employer’s insurance, you have an 8-month window to enroll in Medicare part B without penalty.
COBRA is a federal law that gives you the option to keep your employer group health plan coverage for a limited time after your employment ends or after you would otherwise lose coverage. This continuation coverage is generally offered for 18 months, and 36 months in some cases.
If you qualify for COBRA because the covered employee either 1) died, 2) lost his/her job, or 3) became entitled to Medicare, the employer must tell the plan administrator. Once the plan administer is notified, the plan must let you know you have the right to choose COBRA coverage.
If you don’t receive a notice, but you find out your coverage has ended, or if you get divorced, call the employer’s benefits administrator or the group health plan as soon as possible and ask about your COBRA rights.
If you qualify for COBRA because you’ve become divorced or legally separated from the insured employee or if you were a dependent child or dependent adult who is no longer a dependent, then you or the covered employee needs to let the plan administrator know about your change in situation within 60 days of the change.
When to Buy Medigap Insurance
The first step to getting a quality Medigap insurance plan is to research what is available so when the time comes you will be prepared. MedicareInc.com helps simplify the process with advanced tools and information to easily understand what you can buy and the costs, so you can determine your best options.
The importance of being proactive and not waiting
Most people choose to be 100% covered the month their part B is effective because they don’t want to wait until after turning 65 or after part B is effective to shop around for a plan.
If you wait you may end up going to the hospital or doctor, and paying out of pocket medical bills that would have otherwise been covered by having a Medigap plan in place when first eligible.
You have a 6-month Medigap open enrollment period, during which you can buy any Medigap policy sold in your state for the same price as people with good health, even if you have health problems. This period automatically starts the month you’re 65 and enrolled in Medicare Part B, and once it’s over, you can’t get it again.
Don’t wait until you’re 65 to enroll
Insurance companies allow people to enroll in a Medigap plan up to 6 months before they turn 65, with coverage being effective on the first day of the month they turn 65 or the first day of the month their part B is effective.
This way you are covered the month you turn 65 or the month your part B becomes effective, rather than rushing to find a plan during your Medigap enrollment window.
Speak with your MedicareInc.com agent to plan and choose the Medigap insurance that is best for you.