Some people are shocked to learn that they are required to pay premiums, such as the Part B (which is $170.10 per month in 2021), deductibles, co-pays, and other costs when they are on Medicare. After paying into Medicare and social security for so many years, people think they must be covered entirely. Unfortunately, these Medicare and social security payments do not apply to certain costs associated with Medicare, such as the Part B premium. If you are experiencing problems paying your premiums, there may be certain actions you can take that may reduce your Medicare costs. In this article, we’ll outline how to save more money on Medicare.
If you have specific questions about your Medicare benefits and costs, give our Medicare advisors in Memphis a call. We’re ready to help you at 901-460-7220.
Use Your HSA to Pay Your Premiums
If you’ve contributed to a health savings account, you can pay your Medicare premiums from those funds. The money in HSAs goes in tax-free, and it comes out tax-free, so you won’t have any unexpected charges due to taxes when paying with your HSA. You may use your HSA to pay for the following Medicare expenses:
- Part A premiums
- Part B premiums
- Part C premiums
- Part D premiums
Note that you cannot use your HSA to pay for Medicare supplement premiums.
It’s important to know that once you are on Medicare, you can no longer contribute to an HSA.
Get a Medicare Advantage Plan with Lower Premiums
Note that even if you are enrolled in a Medicare Advantage plan (Part C) or a Medicare supplement, you will still likely owe a premium for Part B, and, depending on your situation, you may owe a premium for Part A (most people don’t though). Read about Medicare Part A here.
Depending on where you live, there may be Medicare Advantage plans available to you that offer a zero-dollar deductible and a reduced Part B premium. Be sure to ask your Medicare advisor if this type of plan is available to you.
Deduct Your Medicare Premiums on Your Taxes
The good news is any Medicare premiums that you do pay may be tax-deductible in specific situations. You may be able to deduct these costs if you have enough medical expenses to file an itemized deduction for medical costs on your 1040. In 2021, the IRS allowed taxpayers to deduct their qualified unreimbursed medical care expenses that totaled more than 7.5% of their adjusted gross income.
If your medical costs equal the threshold for deductions as determined by the IRS yearly, you may deduct most health insurance premiums, including Part B premiums, Medicare supplement premiums, etc with a qualified Schedule A deduction. Make sure to discuss this with your tax professional each year to see if you qualify.
Get Assistance Paying Your Premiums
Depending on your situation, you may qualify for help paying your Part B and Part D premiums through Medicare Savings Programs. You may apply for assistance through your local Medicaid office at the Department of Health and Human Services offices.
If your income is low enough to meet the requirement, you may qualify for partial or full assistance to pay your Part B and Part D premiums. However, if your income is not low enough to qualify for federal assistance, you may consider looking into low-income subsidy options. With these types of programs, you may qualify to receive help paying for costs associated with Part D, including Part D premiums, deductibles, coverage, copays, and coinsurance. These programs help recipients pay for thousands of dollars in Part D costs yearly. Learn more about Part D low-income subsidy programs here.
Appeal Your Medicare IRMAA Costs
You may be able to file a Medicare IRMAA appeal if your premiums are higher due to your higher income. Note that the amount you pay for premiums may be higher than the base amount depending on your taxable income for two years prior.
If your income has decreased in that two years, you may be eligible for a reconsideration in your IRMAA. Social security may decrease the amount you owe based on your current income.
Take Advantage of Your VA Benefits and Medicare
There are certain plans that work in conjunction with VA benefits. Some plans may allow you vision, dental, and gym memberships at no extra cost. In these cases, your VA benefits would work as your primary form of insurance with your Medicare benefits acting as backup coverage. Some of these plans allow up to $75 off of Part B premiums for veterans. This means that instead of paying the $170.10 (2021) Part B premium each month, qualifying veterans could pay $95.10.
Watch the video below for more information, and be sure to speak with our Medicare advisors to learn if these types of options are right for you.
Schedule a Free Consultation
Medicare can be confusing. The best way to save money on your healthcare costs is to understand your Medicare benefits – our team will walk you through your options and coverage to identify what plans may be the best for you. To set up this free consultation with one of our Medicare advisors, call 901-460-7220 or fill out the form on this page.