How much does Part A cost?
Premium-free Part A
Part A premiums
Part A late enrollment penalty
If you aren’t eligible for “premium-free” Part A, and you don’t get it when you’re first eligible, your monthly premiums will go up by 10%. As a penalty, you’ll have to pay the higher premium for twice the number of years you could have had Part A, but didn’t sign up. For example if you were eligible for Part A for 2 years but didn’t sign up, you’ll have to pay the higher premium for 4 years. Usually, you don’t have to pay a penalty if you meet certain conditions that allow you to sign up for Part A during a special enrollment period. Additionally, if you have limited income and resources, your state may help you pay for Medicare Part A and Part B. You may also qualify for Extra Help to pay for your Medicare prescription drug coverage.
What Does Part B cost?
Some individuals automatically get Medicare Part B (Medical Insurance), while others need to sign up for Part B. Learn how and when you can sign up for Part B.
If you don’t sign up for Part B when you’re first eligible, you may have to pay a late enrollment penalty.
How much does Part B cost?
Part B premiums
You’ll have to pay a premium each month for Part B. If you get Social Security, Railroad Retirement Board, or Office of Personnel Management benefits, your Part B premiums will be automatically deducted from your retirement benefit payments. If you don’t get these benefit payments, you’ll receive a billing statement.
Most people will pay the standard premium amount. If your modified adjusted gross income is above a certain amount, you may pay an Income Related Monthly Adjustment Amount (IRMAA). Medicare uses the modified adjusted gross income reported on your IRS tax return from 2 years ago (the most recent tax return information provided to Social Security by the IRS).
For 2019, the standard Part B premium amount will be $135.50 (or higher depending on your income). However, some people who receive Social Security retirement benefits pay less than this amount. You’ll pay the standard premium amount (or higher) if you enroll in Part B for the first time in 2019 or if you don’t get Social Security benefits and if you’re being directly billed for your Medicare Part B premiums (meaning they aren’t being taken out of your Social Security benefits check), you have Medicare and Medicaid, and your premiums are paid by Medicaid, (Your state government pays the standard premium amount of $135.50 in 2019 for you.), your modified adjusted gross income(MAGI) as reported on your IRS tax return from 2 years ago is above a certain amount. If so, you’ll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.
Part B deductible & coinsurance
You pay $183 per year ($185 in 2019) for your Part B deductible. After your deductible is met, you typically pay 20% of the Medicare-approved amount for most Doctor services (including most doctor services while you’re a hospital inpatient), Outpatient therapy, Durable medical equipment.
What Is the Part B late enrollment penalty
In most cases, if you don’t sign up for Part B when you’re first eligible, you’ll have to pay a late enrollment penalty. You’ll have to pay this penalty for as long as you have Part B. Your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B, but didn’t sign up for it. Also, you may have to wait until the General Enrollment Period (from January 1 to March 31) to enroll in Part B. Coverage will start July 1 of that year.
Usually, you don’t pay a late enrollment penalty if you meet certain conditions that allow you to sign up for Part B during a Special Enrollment Period.
Your Initial Enrollment Period ended September 30, 2009. You waited to sign up for Part B until the General Enrollment Period in March 2012. Your Part B premium penalty is 20%. (While you waited a total of 30 months to sign up, this included only 2 full 12-month periods.) You’ll have to pay this penalty for as long as you have Part B.
Costs for Medicare drug coverage
You’ll make these payments throughout the year in a Medicare drug plan:
The same insurance company may offer Medigap policies and Medicare Prescription Drug Plans.
If you join a Medigap policy and a Medicare drug plan offered by the same company, you may need to make 2 separate premium payments for your coverage. Contact your insurance company for more details.
How much does Part D cost?
Most people only pay their Part D premium. If you don’t sign up for Part D when you’re first eligible, you may have to pay a Part D late enrollment penalty.
If your modified adjusted gross income is above a certain amount, you may pay a Part D income-related monthly adjustment amount (Part D-IRMAA). Medicare uses the modified adjusted gross income reported on your IRS tax return from 2 years ago (the most recent tax return information provided to Social Security by the IRS). You’ll pay the Part D-IRMAA amount in addition to your monthly plan premium, and this extra amount is paid directly to Medicare, not to your plan. The chart below lists the extra amount costs by income.
Social Security will contact you if you have to pay Part D-IRMAA, based on your income. The amount you pay can change each year. If you have to pay a higher amount for your Part D premium and you disagree (for example, if your income goes down), use this form to contact Social Security [PDF, 125 KB]. If you have questions about your Medicare prescription drug coverage, contact your plan.
The extra amount you have to pay isn’t part of your plan premium. You don’t pay the extra amount to your plan. Most people have the extra amount taken from their Social Security check. If the amount isn’t taken from your check, you’ll get a bill from Medicare or the Railroad Retirement Board. You must pay this amount to keep your Part D coverage.
If Social Security notifies you about paying a higher amount for your Part D coverage, you’re required by law to pay the Part D-Income Related Monthly Adjustment Amount (Part D-IRMAA). If you don’t pay the Part D-IRMAA, you’ll lose your Part D coverage.
Employer/Union coverage and Part D-IRMAA
Here Are Some Things to remember
Part D premiums by income
The chart below shows your estimated prescription drug plan monthly premium based on your income as reported on your IRS tax return. If your income is above a certain limit, you’ll pay an income-related monthly adjustment amount in addition to your plan premium.
Copayment/coinsurance in drug plans
The amount you pay for each of your prescriptions after you have paid the deductible (if your plan has one) is either a copayment or coinsurance. Some Medicare Prescription Drug Plans have different levels or ” tiers ” of copayments or coinsurance, with different costs for different types of drugs.
Usually, the amount you pay for a covered prescription is for a one-month supply of a drug. However, you can request less than a one-month supply for most types of drugs. You might do this if you’re trying a new medication that’s known to have significant side effects or you want to synchronize the refills for all your medications. If you do this, the amount you pay is reduced based on the amount you actually get. Talk with your prescriber to get a prescription for less than a one-month supply.
Part D late enrollment penalty
The late enrollment penalty is an amount added to your Medicare Part D monthly premium.
You may owe a late enrollment penalty if, for any continuous period of 63 days or more after your Initial Enrollment Period is over, you go without one of these:
If you get Extra Help, you don’t pay the late enrollment penalty.
How much is the Part D penalty?
The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage.
Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($35.02 in 2018) times the number of full, uncovered months you didn’t have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.
The national base beneficiary premium may increase each year, so your penalty amount may also increase each year.
Example Mrs. Martinez is currently eligible for Medicare, and her Initial Enrollment Period ended on May 31, 2014. She doesn’t have prescription drug coverage from any other source. She didn’t join by May 31, 2014, and instead joined during the Open Enrollment Period that ended December 7, 2017. Her drug coverage was effective January 1, 2018.
Since Mrs. Martinez was without creditable prescription drug coverage from June 2014–December 2017, her penalty in 2018 was 43% (1% for each of the 43 months) of $35.02 (the national base beneficiary premium for 2018) or $15.06. Since the monthly penalty is always rounded to the nearest $0.10, she paid $15.06 each month in addition to her plan’s monthly premium.
Here’s the math:
.43 (43% penalty) × $35.02 (2018 base beneficiary premium) = $15.06
$15.06 rounded to the nearest $0.10 = $15.06
$15.06= Mrs. Martinez’s monthly late enrollment penalty for 2018
In 2019, Medicare recalculated Mrs. Martinez’s penalty using the 2019 base beneficiary premium ($33.19). So, Mrs. Martinez’s new monthly penalty in 2018 is 43% of $33.19 or $14.28 each month. Since the monthly penalty is always rounded to the nearest $0.10, she pays $14.28 each month in addition to her plan’s monthly premium.
Here’s the math: .43 (43% penalty) × $33.19 (2019 base beneficiary premium) = $14.28
$14.28 rounded to the nearest $0.10 = $14.28
$14.28= Mrs. Martinez’s monthly late enrollment penalty for 2019
How do I know if I owe a penalty?
After you join a Medicare drug plan, the plan will tell you if you owe a penalty and what your premium will be. In general, you’ll have to pay this penalty for as long as you have a Medicare drug plan.
What if I don’t agree with the late enrollment penalty?
You may be able to ask for a “reconsideration.” Your drug plan will send information about how to request a reconsideration.
Complete the form, and return it to the address or fax number listed on the form. You must do this within 60 days from the date on the letter telling you that you owe a late enrollment penalty. Also send any proof that supports your case, like a copy of your notice of creditable prescription drug coverage from an employer or union plan.
Do I have to pay the penalty even if I don’t agree with it?
By law, the late enrollment penalty is part of the premium, so you must pay the penalty with the premium. You must also pay the penalty even if you’ve asked for a reconsideration. Medicare drug plans can disenroll members who don’t pay their premiums, including the late enrollment penalty portion of the premium.
How soon will I get a reconsideration decision?
In general, Medicare’s contractor makes reconsideration decisions within 90 days. The contractor will try to make a decision as quickly as possible. However, you may request an extension. Or, for good cause, Medicare’s contractor may take an additional 14 days to resolve your case.
What happens if Medicare’s contractor decides the penalty is wrong?
If Medicare’s contractor decides that all or part of your late enrollment penalty is wrong, the Medicare contractor will send you and your drug plan a letter explaining its decision. Your Medicare drug plan will remove or reduce your late enrollment penalty. The plan will send you a letter that shows the correct premium amount and explains whether you’ll get a refund.
What happens if Medicare’s contractor decides the penalty is correct?
If Medicare’s contractor decides that your late enrollment penalty is correct, the Medicare contractor will send you a letter explaining the decision, and you must pay the penalty.
Your actual drug plan costs will vary depending on:
Look for specific Medicare drug plan costs, and then call the plans you’re interested in to get more details.
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