Top 5 Ways to Lower Your Medicare Premiums

With millions of Americans enrolled in Medicare—over 65 million as of 2023—finding ways to save on these expenses is crucial for many beneficiaries. Fortunately, several strategies can help lower your Medicare premiums without compromising your coverage. Here are the top five ways to save money on your Medicare costs:

1. Review Your Income Level

Medicare premiums, particularly for Parts B and D, are influenced by your income. Higher-income beneficiaries may face the Income-Related Monthly Adjustment Amount (IRMAA), which can increase monthly premiums significantly. For example, in 2023, individuals earning more than $97,000 and couples earning more than $194,000 pay an additional $65.90 per month for Part B premiums.

• Stay Informed: Regularly check your income level. If you anticipate a decrease in income, perhaps due to retirement or job loss, consider requesting a new premium determination from Social Security based on your current financial situation.

• Report Changes: If you experience significant income changes, such as a reduction or elimination of income, inform Social Security. Beneficiaries may be eligible for lower premiums based on these changes. It’s essential to report these changes promptly to avoid paying higher premiums unnecessarily.

2. Explore Medicare Savings Programs

Medicare Savings Programs (MSPs) can significantly alleviate costs for eligible individuals. Depending on your income and resources, you may qualify for one of the following programs:

• Qualified Medicare Beneficiary (QMB) Program: This program covers your Part A and Part B premiums, deductibles, and co-payments. According to the Kaiser Family Foundation, in 2021, nearly 10 million people were enrolled in MSPs.

• Specified Low-Income Medicare Beneficiary (SLMB) Program: SLMB pays for your Part B premium only, which can save you over $1,600 annually.

• Qualified Individual (QI) Program: QI also assists with Part B premiums, but eligibility requires annual reapplication.

To determine your eligibility for these programs, check with your state’s Medicaid program, as the income and resource limits vary by state.

3. Consider a Medicare Advantage Plan

Medicare Advantage (Part C) plans are an alternative to Original Medicare (Parts A and B) and often come with lower premiums while providing additional benefits. In fact, according to the Centers for Medicare & Medicaid Services (CMS), about 45% of Medicare beneficiaries were enrolled in Medicare Advantage plans in 2023.

When evaluating Medicare Advantage options:

• Compare Plans: Examine plans that cover essential services you need, such as dental, vision, and wellness programs. These additional benefits can provide significant savings on out-of-pocket costs.

• Assess Networks: Some plans may have lower premiums but require you to use specific networks of doctors and hospitals. Ensure that your preferred providers are in-network to avoid unexpected expenses.

• Look for $0 Premium Plans: Some Medicare Advantage plans offer $0 premiums. While these plans can be appealing, it’s essential to review the benefits and potential out-of-pocket costs carefully.

4. Utilize Preventive Services

Medicare covers a wide range of preventive services at no cost to beneficiaries, which can help maintain your health and prevent more costly medical interventions in the future. In fact, Medicare spent nearly $1.2 billion on preventive services in 2021 alone.

By taking advantage of these services, you can:

• Stay Healthy: Regular screenings, vaccinations, and check-ups can help detect health issues early, potentially avoiding the need for more extensive treatments later. For instance, studies show that individuals who receive regular screenings for diseases such as cancer can have a 20-30% lower mortality rate compared to those who do not.

• Avoid Copays: Many preventive services, such as annual wellness visits, mammograms, and immunizations, are covered without any cost-sharing. Utilizing these services not only keeps you healthy but also helps avoid additional healthcare costs down the line.

5. Shop for Part D Plans Annually

If you have Medicare Part D for prescription drug coverage, it’s crucial to shop for plans each year. Premiums and coverage can change annually, impacting your overall healthcare costs. In 2023, average monthly premiums for Part D plans were approximately $31.50, but this can vary widely based on the plan and your location.

• Use the Medicare Plan Finder: This tool allows you to compare available Part D plans in your area, focusing on monthly premiums, deductibles, and the drugs covered. In 2023, more than 1,000 stand-alone Part D plans were available nationwide, making it essential to find the best option for your medication needs.

• Consider Your Medications: Review your current medications and their costs under each plan. Choose a plan that provides the best coverage for your specific needs, as using the wrong plan can lead to higher out-of-pocket costs for medications.

Conclusion

Lowering your Medicare premiums doesn’t have to be a complex task. By reviewing your income, exploring Medicare Savings Programs, considering Medicare Advantage plans, utilizing preventive services, and shopping for Part D plans, you can take control of your healthcare expenses and maximize your benefits. Remember, with nearly 60% of Medicare beneficiaries facing out-of-pocket costs exceeding $2,000 annually, taking the time to research and evaluate your options can lead to significant savings and a more financially secure future in healthcare.