What is the Medicare Part A Premium?
Most beneficiaries get Medicare Part A benefits (inpatient coverage) premium-free based on the number of years they paid Medicare taxes. However, beneficiaries that did not pay Medicare taxes for the required 10 years pay a monthly premium for their Part A coverage.
Key Takeaways
- Most Medicare beneficiaries do not pay a monthly premium for their Part A coverage.
- If a beneficiary or their spouse did not pay Medicare taxes for the required 40 quarters (10 years) they must pay a monthly premium.
- A premium penalty may apply for late enrollment in Part A.
- If a beneficiary has a Part A premium, Medicare will send a monthly bill.
- Medicare Part A coverage will be terminated if the monthly premium is not paid.
- A Medicare Advantage plan does not negate the Medicare Part A premium.
How Much Is The Part A Premium?
For most beneficiaries, Medicare Part A benefits are available with no monthly premium. Part A benefits are funded through Medicare taxes. However, beneficiaries who did not pay Medicare taxes for a minimum of 40 quarters (10 years) will pay a monthly premium.1Medicare.gov, “Part A costs“, Accessed October 22, 2021
If a beneficiary does not qualify for premium-free Medicare Part A their monthly premium will be based on the number of quarters they, or their spouse, worked and paid Medicare taxes. A beneficiary that has worked and paid into Medicare for 7.5 years to 9.75 years (30 to 39 quarters) would pay $263 for their Part A premium, while beneficiaries who have worked and paid less than that will have a $478 Part A premium.1Medicare.gov, “Part A costs“, Accessed October 22, 2021
Beneficiaries are also eligible for premium-free Part A if:1Medicare.gov, “Part A costs“, Accessed October 22, 2021
- They are already eligible for retirement from Social Security or Railroad Retirement Board.
- They are eligible for Social Security or Railroad Retirement Board benefits but have not applied yet.
- They or their spouse were Medicare-covered government employees.
- They have received disability benefits from Social Security or Railroad Retirement Board for 24 months.
- They have End-Stage Renal Disease (ESRD) and have met certain criteria.
Part A Late Enrollment Penalty
A beneficiary who does not qualify for premium-free Medicare Part A that does not enroll when first eligible will be assessed a Part A 10 premium penalty. The late enrollment penalty lasts for double the number of years they were not enrolled in Part A and did not have other have creditable coverage.2Medicare.gov, “Part A late enrollment penalty“, Accessed October 22, 2021
Medicare Part A Premium Billing?
When a Medicare beneficiary receives retirement benefits from Social Security, the Railroad Retirement Board, or Federal Employee Retirement, their Part A premium (if any) will automatically be deducted from their benefits. If not, the beneficiary will receive a Medicare Premium Bill (CMS-500) in the mail. If a beneficiary does not have premium-free Medicare Part A or receives an IRMAA for Medicare Part D, they will be billed monthly. These bills will arrive by the 10th of the month.3Medicare.gov, “Pay Part A & Part B premiums”, Accessed October 22, 2021
How Does Medicare Handle Late Premium Payment?
When a beneficiary fails to pay their Medicare Part A premium bill on time, they will receive a subsequent from Medicare requesting the full Medicare premium payment. If the beneficiary fails to pay a Medicare premium bill three times in a row, as indicated by the Medicare Premium Bill Table below, their coverage will be terminated.3Medicare.gov, “Pay Part A & Part B premiums“, Accessed October 22, 2021
Medicare Premium Bill Table
The upper right corner of the Medicare Premium Bill states |
It means |
Do this |
|---|---|---|
| This is not a bill | Only received by beneficiaries using Medicare Easy Pay. Premiums owed are withdrawn from their bank account on the 20th of each month. | Nothing. |
| First Bill | This is the initial bill for the beneficiary’s premiums. | Submit payment for the amount due by the 25th of the month. |
| Second Bill | The beneficiary’s premiums were not paid on time as stated on the First Bill. | Submit payment for the amount due by the 25th of the month. |
| Delinquent Bill | The beneficiary’s premiums were not paid on time as stated on the bill. Second Bill. If this bill is not paid in full by the 25th of that month, the beneficiary will lose their Medicare coverage. | Submit payment for the amount due by the 25th of the month, or Medicare coverage will be lost. No further bills will be sent. |
Part A Penalty Waiver/Appeal
If a beneficiary has been notified of a penalty to Part A premium, they can file for an appeal with proof of creditable coverage during the time they were not enrolled in Part A4Medicare.gov, “Medicare Forms“, Accessed October 22, 2021.
How To Get Help Paying For Part A Premiums
Medicaid and Medicare Savings Program (MSP) offer financial assistance to beneficiaries unable to afford Medicare Part A. Qualification is based on a beneficiary’s annual income.
Medicaid is a combined state and federal program that provides healthcare to families and individuals with income at or below the federal poverty level. People who qualify for both Medicare and Medicaid are dual-eligible and receive Part A premium, deductible, and copayment assistance.7Medicare.gov, “Medicaid“, Accessed October 25, 2021
Beneficiary’s with annual income up to 135 percent of the federal poverty level may qualify for a Medicare Savings Program (MSP). Two of the four MSPs provide assistance with Part A premiums:6Medicare.gov, “Medicare Savings Programs“, Accessed October 22, 2021
- Qualified Medicare Beneficiary (QMB)
- Qualifying Individual (QI)
Additional Insurance
While Medicare supplement insurance (Medigap) does not cover Part A premiums, all current plans (A, B, C, D, F, G, K, L, M, and N) cover some or all Medicare Part A deductibles and copayments. All current Medigap policies except Medigap plan A provide some coverage for Part A deductibles. And, all plans provide an additional 365 days of hospital coverage after a beneficiary has used their lifetime reserve days.7Medicare.gov, “How to compare Medigap policies“, Accessed October 22, 2021
Part A Premiums and Medicare Advantage
If a beneficiary that does not have premium-free Medicare Part A joins a Medicare Advantage plan they are required to continue paying their monthly Part A premium in addition to the plan’s premiums.6Medicare.gov, “Costs for Medicare Advantage Plans“, Accessed October 22, 2021
How To Get Help With Part D Questions
Any questions about your Medicare premium bill can be answered by a Medicare professional at 1-800-MEDICARE (1-800-633-4227). TTY: 1-877-486-2048.3Medicare.gov, “Pay Part A & Part B premiums“, Accessed October 22, 2021
Citations
- 1Medicare.gov, “Part A costs“, Accessed October 22, 2021
- 2Medicare.gov, “Part A late enrollment penalty“, Accessed October 22, 2021
- 3Medicare.gov, “Pay Part A & Part B premiums“, Accessed October 22, 2021
- 4Medicare.gov, “Medicare Forms“, Accessed October 22, 2021
- 7Medicare.gov, “How to compare Medigap policies“, Accessed October 22, 2021
- 6Medicare.gov, “Costs for Medicare Advantage Plans“, Accessed October 22, 2021