Do you have to pay Medicare from Social Security?
A person can have monthly premium deductions taken directly from their Social Security payments, or they can choose alternative payment methods instead.
People who receive Social Security benefits can choose to have their Part B premiums come directly out of their monthly check. This amount will automatically be deducted before a check is issued or deposited into a bank account.
Some people may want to pay their premiums directly instead. They can do so online, by mailing in a check, or by setting up automatic payments from their bank account.
Glossary of Medicare terms
We may use a few terms in this article that can be helpful to understand when selecting the best insurance plan:
Out-of-pocket costs: An out-of-pocket cost is the amount a person must pay for medical care when Medicare does not pay the total cost or offer coverage. These costs can include deductibles, coinsurance, copayments, and premiums.
Deductible: This is an annual amount a person must spend out of pocket within a certain period before an insurer starts to fund their treatments.
Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, this is 20%.
Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
This article originally appeared on Medical News Today
Social Security deductions
A person with Social Security benefits may choose to have their Medicare premium taken directly out of their check or direct deposit, much like healthcare offered by employers comes out of a paycheck.
People who receive Social Security before they turn 65 years old will be signed up for Original Medicare (parts A and B) automatically.
Part B
Medicare deductions from Social Security are based on the current year’s premium. Premium amounts are based on income and will increase only as a person or couple reaches certain thresholds.
In 2024, the standard monthly premium for Part B is $174.70. Any individual making $103,000 or less (or couples filing jointly making $203,000 or less) will pay this amount.
Increases in premium amounts follow a stepped program:
Individual or married, filing separately | Married, filing jointly | Monthly premium for Part B |
|---|---|---|
above $103,000, up to $129,000 | above $206,000, up to $258,000 | $244.60 |
above $129,000, up to $161,000 | above $258,000, up to $322,000 | $349.40 |
above $161,000, up to $193,000 | above $322,000, up to $386,000 | $454.20 |
above $193,000 and less than $500,000 | above $386,000 and less than $750,000 | $559.00 |
$500,000 or above | $750,000 or above | $594.00 |
The premium will typically come out directly from Social Security. However, a person can choose to pay their premium using other methods, such as through a bank account.
Read more about Medicare Part B.
Part A
The majority of people will not have to pay a monthly premium for Part A. In most cases, a person who worked for at least 40 quarters (10 years) will qualify for no monthly premium. A spouse of someone who worked for at least 40 quarters (10 years) will also qualify.
Part A premiums are based on a person paying 40 work credits, which typically takes about 10 years. Once a person hits that, they will not need to pay for Part A premiums.
Read more about Medicare Part A.
Parts C and D
A person on Social Security can also sign up for Part D (drug coverage), as well as Medicare Advantage (Part C) plans.
Medicare Advantage plans must offer the same coverage that Original Medicare offers, but they may also provide additional benefits and Part D coverage.
Prices for Part C and Part D will vary between plans. A company providing coverage should provide documentation of what they offer and how much it will cost for the year.
Read about Original Medicare vs. Medicare Advantage.
Can you opt out of Medicare if you get Social Security?
A person can opt out of Medicare if they have Social Security. However, it may be best for most people to avoid doing so.
Parts A, B, and D each come with its own set of penalties if a person opts out. These penalties are based on when and if an individual decides to sign up for these parts in the future.
Read more about late enrollment penalties.
Part A
Most people will not need to pay a premium for Part A.
People who do need to pay a premium for Part A and who delay getting coverage will face a 10% penalty added to each monthly bill. This penalty lasts for double the number of years a person could have signed up for Part A but did not.
For example, if a person waited 3 years to sign up for Part A, they will pay a 10% penalty on each monthly payment for 6 years.
Signing up when first eligible at 65 years old or during a special enrollment period (SEP) can prevent this penalty.
Part B
Similar to Part A, a person can decline Part B coverage when they turn 65 years old.
However, refusing Part B coverage or not signing up for Part B during the initial enrollment period (IEP) may result in a penalty for the person, assuming they do not qualify for an SEP.
The penalty amounts to an extra 10% for each year or 12-month period that a person could have signed up for Part B but did not.
For example, based on 2024 premiums, if a person could have signed up 2 years ago and did not, their monthly premium when signing up in 2024 would increase from $174.70 to $209.64, or ($174.70 x 0.2) + $174.70.
Read about Medicare enrollment periods.
Part D
A person can also opt out of Part D if they’d like, with similar penalties if they do not qualify for an SEP or for Extra Help. Extra Help is a program that reduces the cost of Part D for those who qualify based on income.
The penalty for Part D amounts to an added 1% per month that a person could have signed up for Part D but did not. The 1% penalty is based on the national base beneficiary premium, which is $34.70 in 2024.
For example, if a person did not sign up for Part D for 16 months past the time they could have first signed up, their penalty would be $5.60 (16% of $34.70, rounded to the nearest tenth). Their total monthly premium would then be $40.30.
The penalty will last for the remainder of Part D coverage even if a person switches plans.
Can you take Social Security without taking Medicare?
A person can get Social Security without getting Medicare, but they may face penalties for doing so.
The majority of people should consider signing up for Medicare in the 3 months preceding and the 3 months following the month of their 65th birthday. This is the IEP.
Some people qualify for an SEP. For example, a person who receives qualifying medical coverage from a work plan may be able to delay signing up for Medicare without penalty, as long as they sign up when they stop working or their benefits change.
Penalties for not signing up for Medicare during the IEP or SEP vary by part. Penalties for both parts B and D will last for the remainder of coverage. The Part A penalty will go away after a period of time.
People who want to avoid the penalties should consider signing up for Medicare during their IEP or make sure they qualify for an SEP.
Alternative payment methods
Most people will have their Part B premiums directly deducted from their Social Security payment.
A person can choose to pay for Medicare premiums through other means if they prefer. Currently, four options include:
paying online through a secure Medicare account
signing up for Medicare Easy Pay, where payments get deducted automatically from a bank account
paying directly from a savings or checking account through a bank’s online bill payment service
mailing a payment directly to Medicare
Part A and D premiums get paid monthly. Part B gets billed every 3 months.
Considerations
A person should consider some of the following when considering Medicare coverage and Social Security:
A person does not need to sign up for Medicare when they are first eligible. However, failing to do so will likely result in a penalty for each month or year that they could have signed up but did not.
SEPs allow a person to waive penalties for not signing up at age 65 years, but not everyone qualifies. A person should check if they are eligible to make sure they will qualify for a later enrollment.
Many people choose to sign up for Medicare Advantage plan with additional benefits or Medigap insurance that helps to pay for some services that Medicare does not cover.
Medicare resources
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.
Summary
A person does not have to pay their Medicare premiums directly from their Social Security. Medicare offers four additional ways to pay, including directly through the Medicare website, via Medicare Easy Pay, by mail, and through direct debiting of a bank account.
A person can decide not to sign up for or refuse Medicare at age 65, but they will have to pay a penalty, often monthly, if they sign up in the future. SEPs can help a person avoid penalties.
View the original article on Medical News Today
