6 Ways to Save Money on Medicare Premiums in 2023

Almost everyone has Medicare premiums. If you do, you’ve probably seen those premiums increase steadily since you first enrolled. In fact, a study from PubMed.gov indicated that Medicare beneficiaries spend about 20% (or more!) of their income on insurance premiums and non-covered medical services.

If you find yourself needing to cut Medicare costs, read on to discover six ways to save money on your Medicare premiums.

1. Avoid Penalties

One easy way to cut down your Medicare premiums is by enrolling in Medicare on time. You are penalized for Parts A, B, and D if you do not enroll as soon as you are eligible or lose other creditable coverage. Most people don’t incur a late-enrollment penalty for Part A as most beneficiaries do not pay a premium for Part A, but it does still happen in rare cases. Take a look at the following penalties to find out how much - and how long - you’d have to pay the added amounts.

• Part A: Your premium can increase by up to 10% for twice the number of years you went without coverage.
• Part B: Your premium increases by 10% for each of the 12-month periods you delayed enrollment. You’ll pay this for the rest of your life or as long as you have Part B.
• Part D: You pay a penalty for going 63 days or more without drug coverage. The penalty amount is calculated by taking 1% of the national base beneficiary amount for the year and multiplying it by the number of months you didn’t have coverage. You pay this monthly penalty as long as you’re enrolled in Part D or a Medicare Advantage plan that includes Part D coverage.

You can avoid these penalties by working with an insurance advisor at Local Medicare Specialists.

2. Go on a Shopping Trip

Well…sort of. This one might not be as much fun as we implied, but it can be easier than you think. When choosing your Medicare plans, you should always shop around at different insurance companies to ensure you’re getting the coverage you need at a competitive rate.

For example, all Medicare Supplements offer standardized benefits. This means that Medicare Supplement Plan G is exactly the same at every company. The only difference you’ll see is the premium amounts. Why pay more for the same benefits? 

You can change your Medicare Supplement at any time of the year as long as you can pass a few health questions. (Some states have less strict rules.) If you’ve seen a recent increase in your Medigap premium, it might be time to chat with an independent insurance agent who can do all the shopping for you.

3. Consider Medicare Advantage

If you are someone who is currently enrolled in a Medicare Supplement (Medigap) plan, you might want to consider moving to Medicare Advantage. Your premiums will be considerably lower (some have premiums of $0 per month), but you will have other out-of-pocket costs.

This is not a decision that should be taken lightly. You’ll need to understand how Medicare Advantage plans work, take a look at your provider networks, and compare all plans in your area. However, if Medicare Advantage works for you, you could be saving more than $100 per month in premiums.

4. Report a Decrease in Income

Not everyone pays the same premium for Medicare Part B. While the Centers for Medicare and Medicaid Services (CMS) does set a standard amount each year, about 8% of the population actually pays a higher rate. This is referred to as IRMAA, the Income-Related Monthly Adjustment Amount. 

IRMAA is calculated by looking at your adjusted gross income from two years ago. So, for 2023, your Part B premium was based on your 2021 income. Many people, especially those who have recently retired, have a significant change in their income. If you are paying IRMAA but have had a drop in your income over the last two years, you should file an IRMAA appeal to lower your Part B premium. IRMAA also applies to Part D, so you could see cost savings there as well.

5. Apply for Extra Help

Extra Help is a national program designed to help those with limited incomes with their prescription costs. It can help pay your Part D premium, late-enrollment penalties, and deductibles, and it can reduce your prescription copays.

Eligibility for Extra Help is based on your income and assets. You can qualify for full or partial Extra Help.

6. Apply for a Medicare Savings Program

Lastly, if you have a lower income, you can apply to your state’s Medicare Savings Program or MSP. There are several different MSP levels, all with different eligibility requirements and benefits. (Eligibility requirements vary by state.) Some pick up all your medical costs, while others only help with some of your Medicare premiums.

The four programs include:

• Qualified Medicare Beneficiary (QMB): pays for the Part A and B premiums, deductibles, copays, and coinsurance amounts.
• Specified Low-Income Medicare Beneficiary (SLMB): pays for the Part B premium only.
• Qualifying Individual (QI): pays for the Part B premium only.
• Qualified Disabled and Working Individuals (QDWI): helps pay for the Part A premiums only.

If you are struggling to pay your Medicare premiums, contact the advisors at Local Medicare Specialists. We will review your current plans and help you find ways to save money on your Medicare premiums.