Medicare Premium: What Is It And How Does It Work
Your Medicare premium is the monthly payment you make to have a Medicare insurance plan. Medicare insurance has four parts: Part A , Part B , Part C , and Part D . You pay a different premium for each part of Medicare. Medicare Parts A and B are known as Original Medicare because the insurance coverage is provided directly through the Medicare program.
Premiums for Parts A and B are determined by and billed through Medicare. The premium for Part A can be up to $471 a month as of 2021,1 but you usually dont pay any premiums for Part A insurance . The estimated Part B premium for 2022 is $158.50.2
A Part C plan combines other parts of Medicare and can provide you with a broader range of benefits. These plans are sold through private insurance companies that are approved by Medicare. Premium rates vary depending on the type plan and where you live, but the average premium for 2022 Part C plans is $19.3
Medicare Part D plans are also provided through private insurance companies. The national average Part D premium is $33 for 2022.3 But depending on where you live and the type of plan you have, Medicare Part D costs will vary.
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2 Freed M. et al. . Medicare Advantage 2022 Spotlight: First Look. Kaiser Family Foundation. Retrieved from www.kff.org/issue-brief/medicare-advantage-2022-spotlight-first-look.
About the author
Christian Worstell is a licensed insurance agent and a Senior Staff Writer for MedicareAdvantage.com. He is passionate about helping people navigate the complexities of Medicare and understand their coverage options.
His work has been featured in outlets such as Vox, MSN, and The Washington Post, and he is a frequent contributor to health care and finance blogs.
Christian is a graduate of Shippensburg University with a bachelors degree in journalism. He currently lives in Raleigh, NC.
Where you’ve seen coverage of Christian’s research and reports:
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How And Where Do I Sign Up
There are a few ways to sign up and apply for Medicare. You can apply:
- Online at the Social Security website
- In person applications at your local Social Security office
- By calling Social Security or the Railroad Retirement Board whichever program provides your income benefits will process your application.
For those aging in at 65, Medicare provides a seven-month initial enrollment period . It starts three full months before the month you turn 65 and ends three months after your 65th birthday month.
A General Enrollment Period between January 1 and March 31 takes place each year.
If you enroll during the GEP, coverage for Part B and/or premium-paid Part A will begin on July 1. With eligibility for premium-free Medicare part A, you can sign up anytime during or after your initial enrollment period.
If you miss these enrollment periods and have to buy Part A, enroll during the Annual Enrollment Period between October 15 and December 7. Under certain circumstances, you may qualify for a special enrollment period.
Not signing up for Medicare Part B when first eligible leaves you responsible for a late enrollment penalty. It lasts the entire time that you have Medicare Part B.
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I Have Health Insurance Through My Spouses Employer Can I Still Get Medicare Benefits
If you have other health insurance coverage, usually you are still eligible for Medicare benefits after your 24th month of disability payments. However, Medicare benefits are generally secondary to your other coverage, which means Medicare only pays for covered services after your primary health insurance pays its share.
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How Much Does Medicare Cost
Original Medicare is divided into Part A and Part B .
- Part A helps pay for inpatient hospital care, some skilled nursing care, home health care and hospice care.
- Part B helps pay for doctor services, outpatient hospital care, durable medical equipment, home health care not covered by Part A, and other services. Medicare was never intended to pay 100% of medical bills. Its purpose is to help pay a portion of medical expenses. Medicare beneficiaries also pay a portion of their medical expenses, which includes deductibles, copayments, and services not covered by Medicare. The amounts of deductibles and copayments change at the beginning of each year.
Part A – Monthly Premium
If you are eligible, Part A is free because you or your spouse paid Medicare taxes while you were working. You earn Social Security “credits” as you work and pay taxes. For each year that you work, you earn 4 credits.
You are 65 or older, and you receive or are eligible to receive full benefits fr om Social Security or the Railroad Retirement Board
You are under 65, and you have received Social Security disability benefits for 24 months You are under 65, and you have received Railroad Retirement disability benefits and you meet Social Security disability requirements You or your spouse had Medicare-covered government employment You are under 65 and have End-Stage Renal Disease
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Can I Get Medicare If I Never Worked
Yes, you can get Medicare if you never worked, but youll need to pay a premium for Medicare Part A. If you are a U.S. citizen over 65 and you or your spouse did not pay Medicare taxes for at least 10 years, you may be eligible to purchase Medicare Part A health insurance. In 2020, seniors who did not receive premium-free Part A coverage paid $458 per month if they paid Medicare taxes for less than 30 quarters those who paid Medicare taxes for 30 to 39 quarters pay $252 per month.
You will not be enrolled automatically, so you need to file an application with the Social Security Administration. You can then enroll in Medicare Part A and Part B for a monthly premium during a valid Medicare enrollment period. You will not be able to purchase Part A alone.
Who Is Eligible For Medicare Part B
Part B medical insurance, the second piece of Original Medicare, covers outpatient services, such as doctors visits, lab work, and preventive care.
Here are the eligibility requirements to enroll in Medicare Part B.
- If youre entitled to Part A with no monthly premiums, then you qualify for Part B when youre eligible for Part A.
- If you have to buy Part A, then you can get Part B if:
- Youre an American citizen who lives in the country or a permanent resident who has lived here for five or more continuous years, and
- Youre 65 or older or under 65 and qualify for Medicare due to having a disability, ESRD, or ALS.
Your enrollment period for Part B is the same as Part A: during your Initial Enrollment Period when you first qualify for Medicare, or during the General Enrollment Period .
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Medicare Supplement And Afib
âAtrial Fibrillation is a heart condition in which the heartâs upper chambers beat out of sync with the lower chambers. The result of this is that your heart beats irregularly, and it can cause poor blood flow. Doctors also sometimes refer to atrial fibrillation as a heart arrhythmia.
You may have been scared off by the stories about being denied different Medicare options because of preexisting conditions, but never fear!Medicare Allies is here to do the work for you and make sure you get coverage.
Ultimately, having Atrial Fibrillation is not a deal-breaker when it comes to being approved for a Medicare Supplement. However, it is a barrier to entry in many cases.
While a heart arrhythmia by itself is not a reason for denial, the drugs you take and any other conditions you have in conjunction with Atrial Fibrillation could result in a decline. Even if youâve recovered, there is often a lookback period of two or more years.
Itâs not impossible to get a Medicare Supplement if you have Atrial Fibrillation, but it will reduce your options.
Luckily, you have Medicare Allies on your side, and we love a challenge!
Medicare Eligibility For Part D
To be eligible for Medicare Part D you must be enrolled in Medicare Part A and/or Part B. You are not eligible for a Part D drug plan if you are enrolled in Medicare Part C. Medicare Part D plans are run by private insurance companies, so premium prices and covered drugs will vary by plan.
You should enroll in a Medicare Part D plan when you are first eligible for Medicare, or risk paying a late enrollment penalty.
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Can You Enroll In Medicare Before You Turn 65
You may be eligible for Medicare before age 65 if:
- Youve received Social Security Disability Insurance for at least 24 months
- Youll get Medicare Part A and Part B automatically starting the first day of your 25th disability month. You should get your Medicare card in the mail three months before this date.
- You have Amyotrophic Lateral Sclerosis , or Lou Gehrigs disease
- Youll get Part A and Part B automatically in the month your SSDI benefits begin.
- You have permanent kidney failure, or end-stage renal disease
- Youll need to sign up for Medicare yourself. Your coverage usually starts the first day of the fourth month of dialysis treatment or in the month youre admitted to a Medicare-certified hospital for a kidney transplant.5
A Word of Advice
If you dont have any other type of health insurance, you should enroll in Medicare Parts A and B when you turn 65.
Finding The Right Plan For You
Whenshopping for health insurance its important to consider your currenthealthcare needs and any needs you anticipate in the future. Its alsoimportant to consider your budget and what you can afford.
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Effective Date Of Coverage
Once an individual is determined eligible for Medicaid, coverage is effective either on the date of application or the first day of the month of application. Benefits also may be covered retroactively for up to three months prior to the month of application, if the individual would have been eligible during that period had he or she applied. Coverage generally stops at the end of the month in which a person no longer meets the requirements for eligibility.
What Does Medicare Cover
Medicare helps pay for certain health care services and durable medical equipment. To have full Medicare coverage, Medicare beneficiaries must have Part A and Part B .
The following is a partial list of Medicare-covered services. The covered services listed below may require payment of deductibles and Co-Payments.
If you have questions about covered services, call Medicare at 1-800-633-4227.
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Who Qualifies For Medicare Disability
You can qualify for Medicare if you have a disability and have been approved for Social Security Disability Insurance . In most cases, youll need to wait 24 months before your Medicare coverage begins.
There is a 2-year waiting period that begins the first month you receive a Social Security benefit check. At the start of your 25th month of SSDI coverage, youll be automatically enrolled in Medicare.
Am I eligible for Medicare disability coverage if I am younger than age 65?
Medicare disability coverage doesnt have an age requirement. You can get Medicare coverage as long as you have a disability and have been approved for SSDI.
Sign Up: Within 8 Months After The Active Duty Service Member Retires
- Most people dont have to pay a premium for Part A . So, you might want to sign up for Part A when you turn 65, even if the active duty service member is still working.
- Youll pay a monthly premium for Part B , so you might want to wait to sign up for Part B.
Avoid the penalty & gap in coverageIf you miss this 8-month Special Enrollment Period, youll have to wait to sign up and go months without coverage. You might also pay a monthly penalty for as long as you have Part B. The penalty goes up the longer you wait to sign up. How much is the Part B late enrollment penalty?
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How Do People With Disabilities Enroll In Medicare
If youre under 65 and receiving Social Security disability benefits, enrolling in Medicare is easy. In most cases, you wont need to do anything. Youll automatically get Part A and Part B coverage as soon as youre eligible. For most disabilities, your Medicare coverage automatically starts after youve received SSDI for 24 months.
All you need to do is check the mail for your Medicare card. Your new card should arrive three months before your Medicare coverage starts. This means that most adults qualifying for Medicare with a disability will get their card in month 21 of their SSDI. Youll have lots of time to find out exactly whats covered before your Medicare coverage starts on the first day of month 25.
If you are on disability when eligible for Medicare at age 65, youll be automatically enrolled in Original Medicare. Your Part B monthly premium can be deducted from your Social Security benefits, and you can start using your Medicare coverage as soon as you turn 65.
How Does Medicare Part C Work
Medicare Part C plans are sold by private insurance companies as an alternative to Original Medicare. Medicare Part C plans are required by law to offer at least the same benefits as Medicare Part A and Part B.
There are several different types of Medicare Advantage plans, such as HMO plans and PPO plans. Each type of plan may feature its own network of participating providers.
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Reimbursement For Part A Services
For institutional care, such as hospital and nursing home care, Medicare uses prospective payment systems. In a prospective payment system, the health care institution receives a set amount of money for each episode of care provided to a patient, regardless of the actual amount of care. The actual allotment of funds is based on a list of diagnosis-related groups . The actual amount depends on the primary diagnosis that is actually made at the hospital. There are some issues surrounding Medicare’s use of DRGs because if the patient uses less care, the hospital gets to keep the remainder. This, in theory, should balance the costs for the hospital. However, if the patient uses more care, then the hospital has to cover its own losses. This results in the issue of “upcoding”, when a physician makes a more severe diagnosis to hedge against accidental costs.
To Qualify For Medicare You Need To Get Disability Benefits From:
- Social Security
- Railroad Retirement Board
If you or your spouse worked for a railroad, call the Railroad Retirement Board at 1-877-772-5772.
If you live in Puerto Rico or outside the U.S.
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The Cares Act Of 2020
On March 27, 2020, former President Trump signed a $2 trillion coronavirus emergency stimulus package, called the CARES Act, into law. It expanded Medicare’s ability to cover treatment and services for those affected by COVID-19, the novel coronavirus. The CARES Act also:
- Increased flexibility for Medicare to cover telehealth services.
- Increased Medicare payments for COVID-19-related hospital stays and durable medical equipment.
For Medicaid, the Families First Coronavirus Response Act clarified that non-expansion states can use the Medicaid program to cover COVID 19related services for uninsured adults who would have qualified for Medicaid if the state had chosen to expand. Other populations with limited Medicaid coverage are also eligible for coverage under this state option.
Who Qualifies For Medicare Part D
Medicare Part D covers prescription drugs and, like Medicare Part C, is available through private insurers that are approved by Medicare. To be eligible to enroll in a Medicare prescription drug plan , you must have Medicare Part A and/or Part B and you must live in the service area for the prescription drug plan in which you want to enroll. To be eligible to enroll in a Medicare Advantage plan with prescription drug coverage , you must have Medicare Part A and Part B, and you must live in the service area for the MAPD plan youre considering.
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