An unexpectedly high Medicare bill can leave anyone reeling, but let’s get to the bottom of it.
If you feel frustrated or confused by an unexpected bill, you’re not alone—this unpleasant surprise hits many new beneficiaries hard.
There are a number of reasons why your Medicare bill might be higher than you first expected.
For starters, if your Medicare Part B payments are not automatically deducted from your Social Security, you’ll likely be paying your Part B payments three months in advance. Original Medicare (Medicare Part A and B) is usually billed at quarterly intervals.
If you’re still wondering why your bill is so high, keep in mind that there could be a number of factors at play, including penalties, your income, social security, and more.
In this guide, we’ll help you figure out why your Medicare bill is so high.
Why Is My Medicare Bill For 3 Months at a Time?
If your Medicare Part B payments are not automatically deducted from Social Security, then after you enroll in Medicare, you will receive your first Medicare bill, which invoices you the amount you need to pay for the upcoming following three months.
After your first payment, you can typically expect to be billed for each quarter in advance.
So, if you’ve signed up for Medicare and Social Security doesn’t automatically withdraw your premium, you’ll generally be paying your Part B premium in advance every three months.
Once you switch to Social Security automatic withdrawal, your Part B premium payment will be withdrawn to monthly.
How Often Do You Have To Pay in Advance For Medicare
In general, if you are not having your Medicare payments deducted from Social Security, Medicare is billed every three months. After your first payment, you will receive your next bill three months later.
Common Reasons Your Medicare Bill Might Be High
You’re Not on Social Security Yet
If you’re not on Social Security yet, but you’ve signed up for Medicare, then that could be the reason that your bill is higher than what you expected.
Once you’re on Social Security, your Medicare amount should be deducted automatically and you won’t receive a bill.
Penalties
If you don’t enroll in Medicare when you first become eligible, and you don’t have creditable coverage, you might end up paying penalties.
The following penalties apply for Original Medicare:
- Medicare Part A: If you don’t qualify for no-premium Medicare Part A, you may incur a late enrollment penalty for Part A. Take the number of months you didn’t sign up for Medicare and double it. That’s how long you’ll be charged a 10% penalty. For example, if you became eligible at the beginning of March and didn’t sign up until the end of June, you’ll be paying a 10% penalty for eight months.
- Medicare Part B: A fee of 10% of the total cost for every 12-month period you didn’t sign up for Medicare Part B (and didn’t have creditable coverage) will added to your bill. For example, if you didn’t sign up for one year, you’d pay 10% extra, and if you didn’t sign up for five years, you’d pay 50% extra. This penalty doesn’t go away.
Income Adjusted Rate
If you have a high income, you’re likely going to pay more for Medicare.
Medicare was originally created to help those in retirement who don’t have the means to cover their medical expenses without help.
If you earn more than a certain amount, you will pay an additional fee called the “Income Related Monthly Adjustment Amount” or IRMAA. IRMAA applies to Medicare Part B and Medicare Part D, not Medicare Part A.
Payments Go Up Annually
Payments for Medicare Part B typically go up annually. So, if this is your second or third year of being on Medicare and you notice an increase in the amount on your bill, that could be the reason why.
How to Avoid a Higher Bill
While you can’t avoid earning above a certain threshold, there are other things you can do to help make sure your Medicare bill isn’t too high.
To start with, you can enroll in Medicare as soon as you become eligible (unless you have creditable coverage). This way, you could avoid paying penalties further down the line. Even if you don’t need it immediately, you might need it later.
Next, each year you could check the expected amount due for the next year for Medicare Part B. That way, you won’t be caught off-guard if the Part B premium amount increased.
Also, you can make sure you’re signed up for Social Security before you enroll in Medicare. This way, your payments will be deducted monthly instead of paying manually three months in advance.
To Wrap Up…
Your first Medicare bill might be a shock to the system, but there are several reasons why it might not be what you expected.
Remember, if your Medicare Part B payments are not automatically deducted from Social Security, you’re paying three months upfront.
Also, make sure you’re aware of whether you’re paying any penalties or if you’re paying more because you’re a high-earner.
If you have any more questions, click below to chat with a licensed insurance agent. We’ll do our best to help you navigate the world of health and wellness.