By Rusty Gloor, National Social Security Advisor at the AMAC Foundation, the nonprofit arm of the Association of Mature American Citizens
Dear Rusty: My wife and I have a Medicare Advantage Plan and we do not use Medicare for our claims. However, we still have the Medicare premium that is deducted from our Social Security checks. Is this correct? Signed: Curious
Dear curious: If you choose to take outpatient Medicare coverage after age 65, you must pay that Part B premium even if you decide to purchase a Medicare Advantage plan instead of using “original Medicare” to manage your healthcare claims.
Medicare Advantage plans (often referred to as Medicare “Part C”) are health care plans offered by private insurers that will manage your health care claims rather than by the federal government. But you can’t get a Medicare Advantage plan without first being enrolled in Medicare Part A (inpatient hospitalization coverage) and Part B (outpatient services coverage) and paying the associated Part B (and perhaps Part A) premium.
As you know, you pay a low premium (or maybe no premium) for your Medicare Advantage plan. That’s because the Part B premium you now pay from Social Security actually goes to your Medicare Advantage plan provider, allowing them to provide you with equivalent coverage at little or no additional cost. Some Medicare Advantage plans even provide additional coverage that Medicare Part B does not, such as dental and vision and sometimes prescription drug coverage. If all that sounds tempting, remember that Medicare Advantage plans usually also have restrictions on which medical providers you can use, as opposed to “original Medicare” which allows you to use any medical provider that accepts Medicare (almost all).
So, when you see or hear a Medicare Advantage provider advertise “free” or “very low cost” coverage, recognize that they can only offer that because the government pays them a set amount of Medicare Part B for your care. premium that has been taken from your social security. The Part B premium you pay from your Social Security benefits is why your Medicare Advantage plan premium is as low as it is.
Many people like the cost-efficiency and additional coverage offered by Medicare Advantage plans and are comfortable with the limitation of using providers within the network. Many others choose “original Medicare” because of its inherent flexibility to use just about any health care provider they want. You should always carefully evaluate what type of health coverage is right for you personally.
This article is for informational purposes only and does not constitute legal or financial guidance. It reflects the views and interpretations of the AMAC Foundation staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its personnel are not affiliated with or endorsed by the Social Security Administration or any other government agency. To submit an inquiry, please visit our website (amacfoundation.org/programs/social-security-advisory) or email us at [email protected].