Welcome to Medicare School Daily, where we help you understand Medicare, save money,
avoid mistakes, and above all else, get the most out of your Medicare benefits.
As people go on Medicare, there are several decisions they have to make.
One is they have to make sure they are enrolling into the right plan.
And after they've selected those plans, now they have to pay for those plans.
And so today, that's what I want to address.
How do you pay for your Medicare plans?
Well, it just really depends on what kind of plan that you have.
With each of the plans there's different options.
I'm going to go through these with you during this video today.
Medicare Part A. Now, for most people, Medicare part A is going to be no cost.
So we don't even have to really worry about payment mode because it's premium free.
As long as you have paid or your spouse has paid into the Medicare system for at least
40 quarters, which is 10 years worth of work and you paid that through FICA taxes, then
there will be no cost to you for Medicare Part A. So that takes care of A. Now, when
it comes to B. Medicare Part B is not free.
Right now, everyone that's on Medicare is paying $144.60.
And there's some people who pay more for that if they're high income.
But for 95 percent of the population, they're paying $144.60 for their part B premium on
a monthly basis.
So if we’re on Social Security, this is our only option.
There's no other payment mode.
The Medicare premiums will absolutely have to come out of your Social Security check.
Now, if we're not on Social Security, we do have a couple options.
So Part B can be paid through what is called the EZ system.
And this is a bank draft either through a checking or savings account or you can actually
have them bill you on a quarterly basis.
So if we're not taking Social Security; they will automatically send you a quarterly bill.
This would be three months times the $144.60.
And that is always due on the 25th day of the month before your coverage begins.
So my coverage starts July 1,
I'll get a bill for three months that'll be due June 25th.
And then every quarter thereafter.
Now, some people don't like a quarterly bill.
They don't want the hassle of writing a check or they just don't like the cash outlay three
months at a time.
So then they give you this option called EZ pay, and we give them a certain form and you
give them a voided check and now what they'll do is they'll deduct that on the 20th
of the month every month that you have coverage.
It just comes out of a checking or savings account.
And so it's a very good system.
Been around a long time.
We hear very, very few complaints, if any, any longer about that system.
So that may be a better fit for you as well.
Now, let's talk about supplemental plans.
And when a person buys a supplemental plan, what they're doing is they're staying enrolled
in Medicare A and B, they're transferring the risk of the gaps to this supplemental
company.
So they certainly have to pay a premium for that company to take that risk from them.
And so when it comes to supplemental plans, social security check deductions are not an
option at all.
Social security will not at all collect premiums for supplemental companies.
So we only have two options, bank draft and direct bill.
Now, I would tell you that the bank draft is the normal way today.
That's the normal way people pay.
Why?
It's just convenient.
We've got to give the insurance company a routing number and account number.
Some companies let you pick the day of the month to draft, others will pick the day for
you.
And if you're not comfortable, though, doing a bank draft, as some people aren't, then
they also will do a direct bill.
But here's the way direct bills work today with almost all carriers, they usually charge
you an additional fee to get a bill.
Costs them extra money, so they pass it on to you.
And then again, it's going to be quarterly.
They will not bill you monthly.
There are a couple of carriers around the country that will, but most will not.
If you want a direct bill, it’ll be quarterly.
So, again, if my coverage begins July 1, I'm going to get a bill right before that coverage
begins.
And it has to be for three months and then we'll get a three month bill every month thereafter.
So we’re always paying three months in advance if we decide to go with that particular option.
And then when it comes to prescription drug plans.
Prescription drug plans, we have several options.
Number one, if you're on Social Security, you're not required to pay for your drug plan
out of that.
But you can.
And so this is definitely an option, a social security check deduction, if you choose.
Now, a bank draft is available through some carriers.
So let’s just say it’s limited.
Some of the carriers will give you the option to do an EFT; others will not.
And all of them will certainly give the option to do a quarterly bill, if that's something
you'd like.
Also pay the whole year off or just pay monthly if you'd like.
But they just basically are going to send you an invoice.
The drug plan will send that invoice to you.
With advantage plans you have all three options.
If you're on Social Security, it can come out of there, bank draft, or a direct bill.
Now, there are many, many plans that are advantage plans today that have no premiums.
So if it's a zero premium plan, you wouldn’t have to worry about that.
But if there is a premium attached to your Medicare Advantage plan, then you can pay
with all those different modes.
And so, number one, you want to enroll in the right plan and then you have to pay for
those plans.
These are your options.
Thanks so much for watching.