• Enrolling on time, reporting changes in income, and shopping around for plans can all help to lower your Medicare premiums.
  • Programs like Medicaid, Medicare Savings Plans, and Extra Help can help cover healthcare costs.
  • Individual states may also have programs to help cover healthcare costs.

Depending on which Medicare part or plan you choose, you may have a monthly premium. The costs of these premiums can add up. In fact, a study from 2017 estimated that a quarter of all people with Medicare spend 20 percent or more of their income on premiums and other uncovered medical services. However, there are several ways to help save on your Medicare premiums.

Keep reading to learn about 10 strategies that you can implement to keep costs down.

There are a variety of ways that you can potentially save on your Medicare premiums. Below, we’ll explore each of them in more detail.

Many people are automatically enrolled in original Medicare (Part A and Part B). However, others need to sign up.

The first time that you can enroll in Medicare is during your Initial Enrollment Period (IEP). This is a seven-month period made up of the month you turn 65 as well as the three months before and after.

Some parts of Medicare have late enrollment penalties. This means that you may have to pay extra for your monthly premium if you don’t enroll when you’re first eligible. The late enrollment penalties are:

  • Part A: Your monthly premium can increase by up to 10 percent. You’ll pay this increased premium for twice the number of years you could have enrolled in Part A but didn’t.
  • Part B: Your monthly premium can rise by 10 percent of the standard Part B premium for each 12-month period that you could have enrolled in Part B, but chose not to. You’ll pay this the entire time you have Part B.
  • Part D: You may pay additional costs for Part D premiums if you went 63 days or longer after your Initial Enrollment Period without some form of qualifying prescription drug coverage.

Knowing if you’ll have to pay a monthly premium for Part A can help you plan for which type of Medicare to enroll in.

Most people don’t pay a monthly premium for Part A. This is because they’ve paid Medicare taxes for a specified number of quarters while working, usually 30 quarters or more.

People who’ve not paid Medicare taxes for a sufficient amount of quarters pay a monthly premium for Part A. In 2020, you may need to pay up to $458 per month if you’re not eligible for premium-free Part A.

Some parts of Medicare are associated with IRMAA, or what’s known as an income-related monthly adjustment amount.

An IRMAA is an additional surcharge that can be applied to the monthly premiums for Part B and Part D in households with higher incomes. This is determined based off of income tax return information from two years prior.

If you’re currently paying a surcharge on your monthly premiums due to IRMAA, you can report a change in income due to something like a divorce, the death of a spouse, or a reduction in work.

You can do this by calling the Social Security Administration (SSA), completing a life-changing event form, and providing the appropriate documentation. The SSA can use this information to potentially reduce or remove the surcharge.

Medicare Advantage (Part C) is a group of coverage plans sold by private insurance companies. These plans include everything that’s covered under original Medicare and may also include additional benefits like dental and vision coverage.

Part C plans often have lower monthly premiums. In fact, it’s estimated that more than half of the available Part C plans have no monthly premium.

Because of this, Part C plans may be a good option for those looking for lower premium costs. This may be particularly true if you:

  • are not eligible for premium-free Part A
  • need to pay late enrollment penalties for parts A and B
  • have to pay an IRMAA for your Part B plan

There are some parts of Medicare that are sold by private companies. These include:

  • Part C (Advantage)
  • Part D (prescription drug coverage)
  • Medigap (Medicare supplement insurance)

The monthly premiums for these plans are set by the companies offering them. The amount that you’ll pay can vary widely by the specific plan, the company offering it, and your location.

Because of this, it’s a good rule of thumb to compare multiple plans offered in your area before selecting one. Medicare has a helpful comparison tool for Part C, Part D, and Medigap plans.

Medicaid is a joint federal and state program that can help people with lower incomes or resources pay for their healthcare costs. It can also help to cover services that aren’t normally covered by Medicare, such as long-term care.

Medicaid programs can vary from state to state. To find out more about Medicaid programs available in your state, and to see if you qualify, contact your state’s Medicaid office.

MSPs are programs that can help you pay for the costs of your Medicare premiums. You may qualify for an MSP if you:

  • are eligible for Part A
  • have an income at or below a specified limit, depending on the type of MSP
  • have limited resources, such as a checking or savings account, stocks, or bonds

There are four types of MSPs:

  • Qualified Medicare Beneficiary (QMB): Helps pay for both Part A and Part B premiums as well as deductibles, copays, and coinsurance.
  • Specified Low-Income Medicare Beneficiary (SLMB): Helps pay for Part B premiums only.
  • Qualifying Individual (QI): Helps pay for Part B premiums only.
  • Qualified Disabled and Working Individuals (QDWI): Helps pay for Part A premiums only.

In order to see if you qualify for an MSP, contact Medicare or your state’s Medicaid office.

Extra Help is a program that can help people with limited income or resources pay for the costs associated with Medicare prescription drug plans. Examples of costs covered by Extra Help are monthly premiums, deductibles, and copays.

It’s estimated that the assistance provided by Extra Help is worth about $5,000 per year. Additionally, people that are using Extra Help won’t need to pay the late enrollment penalty for Part D plans.

In order to qualify for Extra Help, you must meet specific limits on income and resources. To find out if you qualify for Extra Help and to apply for the program, visit the SSA’s Extra Help site.

Additionally, some people qualify automatically for Extra Help. These groups include:

  • individuals with full Medicaid coverage
  • those who receive help from an MSP, specifically a QMB, SLMB, or QI program
  • people getting Supplemental Security Income benefits from the SSA

Some states may have an SPAP. These programs can help with the cost of prescription drugs and may also help cover Part D premiums.

Not all states have SPAPs. Additionally, coverage and eligibility requirements can vary by state. Medicare has a useful search tool both to see if your state has an SPAP and what that program covers.

In addition to all of the cost-saving methods we’ve mentioned above, certain states may have further programs that can help you save on your Medicare premiums.

In order to find out more, contact your State Health Insurance Assistance Program (SHIP). You can get the information for your state through the SHIP website.

The costs of Medicare premiums can add up. However, there are some ways that you can work to help decrease the costs.

Some cost-lowering options for anyone with Medicare include being sure to enroll on time, reporting changes in income, and considering a Part C plan as opposed to original Medicare.

There are also programs in place to help people with lower incomes or resources pay for the cost of healthcare, including premiums. These include Medicaid, Medicare Savings Programs, and Extra Help.

Additionally, your state may have other programs in place to help lower healthcare costs. Be sure to contact your state’s State Health Insurance Assistance Program for additional information.

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