A person enrolled in original Medicare Part A receives a premium bill every month, and Part B premium bills are due every 3 months. Premium payments are due toward the end of the month.
Original Medicare consists of Part A, which is hospitalization insurance, and Part B, which is medical insurance. Other Medicare programs, which private health insurance companies offer, may also involve monthly premiums, with payments due by the date on the bill.
This article discusses when premiums are due for original Medicare (parts A and B) and for other Medicare programs. It also examines the costs of premiums, the notifications for late payments, the non-premium Medicare costs, and some programs that may help with costs.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
The amounts charged and payable for original Medicare (parts A and B) premiums depends on whether or not a person receives certain benefits.
The following sections will look at this in more detail.
With Social Security or Railroad Retirement Board benefits
For example, if a person gets Social Security (SS) or Railroad Retirement Board (RRB) benefits, they are eligible for premium-free Part A. Also, Part B premiums will be deducted automatically from their monthly checks.
People who do not get SS or RRB benefits will receive bills for their Medicare premiums. Medicare will issue Part A bills monthly and Part B bills every 3 months.
There are several ways to pay the premiums, including:
- through the Medicare account
- online through a bank’s bill payment service
- by mailing payment to Medicare
- by using Medicare Easy Pay, which is a free service that deducts the premiums from a person’s bank account, usually on the 20th day of the month
There are several other Medicare programs with premiums that a person will need to pay. The following sections will look at these in more detail.
Instead of enrolling in original Medicare (parts A and B), some people choose to enroll in Part C, or Medicare Advantage. This is an alternative to original Medicare.
In that case, a person must pay their Part B premiums in addition to their Medicare Advantage plan costs.
Learn more about choosing a Medicare Advantage plan here.
Medicare Part D
Original Medicare does not include prescription drug coverage, so a person may choose to get Part D, which does offer this benefit.
If a person enrolls in a Part D prescription drug plan, they will pay an additional monthly premium for the plan.
Medicare supplement insurance
Medigap is a Medicare supplement insurance plan that pays 50–100% of the original Medicare (parts A and B) out-of-pocket costs.
These plans are available to people enrolled in original Medicare, and there will be a monthly premium to pay.
Learn more about how Medigap plans work here.
How to pay these premiums
Because private health insurance companies offer Medicare Advantage, Part D, and Medigap plans, people must pay the premiums directly to the plan provider rather than to Medicare.
Most companies offer different ways of paying bills, including:
- direct billing to pay online or through the mail
- credit card payments
- SS check deduction
Each Medicare part has differing costs, depending on a person’s circumstances and income levels. Most Medicare premiums have increased in 2021.
Learn more about the costs for each part here.
People are eligible for premium-free Part A if they paid Medicare taxes for at least 40 working quarters.
In 2021, if a person paid Medicare taxes for fewer than 30 quarters, they may buy Part A for $471 per month. An individual who paid the taxes for 30–39 quarters may get it for $259 per month in 2021.
Part B premiums in 2021 are $148.50 per month for people with an income of $88,000 or under. The premiums are higher for individuals with an income that exceeds this amount.
Some Part C, or Medicare Advantage, plan premiums are $0, but others range from $100 to $200 per month.
People can use this online tool to compare various Medicare Advantage plans.
In 2020, the average Part D monthly premium base was $32.74 for people with an income of $87,000 or under. As with Part B, the premiums increase in relation to having an income above a certain amount.
People can use this online tool to compare various Part D plans.
Monthly premiums for Medigap vary among the plans and the companies that offer them. They also vary from one area of the country to another.
Costs can range from under $50 to several hundred dollars per month.
Notifications about late premium payments differ between original Medicare and the Medicare programs that private health insurance companies offer.
For original Medicare (parts A and B), Medicare will send a person a First Bill. If they are late with payment, they will get a Second Bill, which includes the past-due premium amount and the premium that is due the following month.
If a person does not pay the Second Bill by the 25th day of the month, they will receive a Delinquent Bill. People who do not pay the Delinquent Bill by the 25th day of the next month will lose coverage.
Parts C and D
Part C, or Medicare Advantage, plans and Part D plans have a minimum 2-month grace period for late payment of a premium before a person is disenrolled.
The plan provider will send a bill with the amount due and the due date. They will also send a written notice of nonpayment, which explains that disenrollment will occur if the person does not make full payment within the grace period.
Other than premiums, Medicare parts have other costs. The following sections will look at these in more detail.
Part A costs pertain to inpatient services. They include:
- a $1,484 deductible for each benefit period in 2021
- a $0 coinsurance for days 1–60
- a $371 coinsurance per day for days 61–90 in 2021
- a $742 coinsurance for each lifetime reserve day for days 91 and beyond in 2021
Part B costs pertain to outpatient services. They include:
- a $148.50 monthly premium
- a $203 annual deductible
- a 20% coinsurance
Parts C and D
Part C, or Medicare Advantage, and Part D costs include deductibles, copays, and coinsurance. These costs vary widely by plan and the companies that offer them.
The following programs may help people pay Medicare costs:
- Extra Help: This program for people with limited incomes helps pay Part D costs, assisting with about $5,000 of medication expenses per year.
- Medicaid: This state-federal program helps people with low incomes and limited resources pay their healthcare costs.
- Medicare savings programs: These programs can help qualified people pay certain costs.
Medicare premiums have various payment due dates. Original Medicare (parts A and B) premiums are due on the 25th day of the month. However, premiums for Medicare Advantage plans, Part D plans, and Medigap plans are due on whatever date is on the monthly bill.
Aside from premiums, Medicare costs include copays, deductibles, and coinsurance. If a person has difficulty paying their Medicare costs, they may qualify for one of the programs that help people with low incomes.