As a Medicare beneficiary, you’re likely aware that your monthly premiums can vary depending on a variety of factors, including your income. But did you know that your Social Security benefits can also impact your Medicare premiums?
Here’s what you need to know:
Social Security and Medicare are closely linked
Social Security and Medicare are two separate programs, but they are closely linked. Most people become eligible for Medicare at age 65, which is also when they can start receiving Social Security retirement benefits.
Because of this connection, the Social Security Administration (SSA) plays a key role in determining your Medicare premiums.
Medicare Part B premiums are affected by your income
Medicare Part B premiums cover outpatient services, such as doctor visits, lab tests, and preventive care. Most beneficiaries pay a standard monthly premium for Part B, but if your income is above a certain threshold, you may be subject to an Income-Related Monthly Adjustment Amount (IRMAA).
The IRMAA is an additional amount that high-income beneficiaries must pay on top of the standard Part B premium. The amount of the IRMAA depends on your income as reported to the IRS. If you receive Social Security benefits, the SSA will use your income information to determine if you owe an IRMAA.
Social Security benefits can be subject to a Medicare premium withhold
If you receive Social Security benefits, your Part B premium can be automatically deducted from your monthly benefit payment. This is known as the Medicare premium withhold.
The amount of the Medicare premium withhold depends on your income and whether you owe an IRMAA. If your income is high enough, the SSA may withhold the entire amount of your monthly Part B premium from your Social Security benefit.
What can you do if you’re affected?
If you’re affected by the IRMAA or the Medicare premium withhold, there are steps you can take to minimize the impact on your finances. For example, you may be able to appeal an IRMAA determination if your income has gone down since the IRS reported your income.
Additionally, you may be eligible for programs that can help pay your Medicare premiums, such as the Medicare Savings Programs or Extra Help.
The bottom line
Your Social Security benefits can impact your Medicare premiums, so it’s important to understand how these two programs are connected. If you’re concerned about the effect of your Social Security benefits on your Medicare premiums, consider speaking with a licensed insurance agent or a Social Security representative to learn more about your options.