Medicare has a lot of rules, and as you’re evaluating various plans to provide for your health during your golden years, you might be wondering if you can be denied Medicare Advantage coverage due to your income.
The short answer is no. Medicare Advantage is not based on income. However, high-income individuals and couples may pay higher overall premiums. For more information about how this works (and how to get help paying for a Medicare plan premium), keep reading.
About Medicare Advantage
Also referred to as Medicare Part C, Medicare Advantage is a Medicare plan that includes Original Medicare (Parts B and A) with additional coverage options, including routine vision and dental care and prescription drug coverage.
These Medicare plans are provided by a private insurance company, and your plan premium will be based on the type of plan you choose. Most, but not all, plans include Medicare Part D prescription drug benefits and coverage for additional health care services. However, Medicare plans vary considerably, so we recommend speaking to a Medicare Advantage specialist to choose a plan that works best for your health needs.
Your Medicare Advantage premiums and medical costs can be affected by the following:
- How often you seek health care services
- The extent of medical treatment
- Coverage benefits you add to your plan
- Whether you visit a doctor inside or outside of your plan’s network or service area
- Whether you visit a doctor who accepts Medicare
Fortunately, there is an annual cap on out-of-pocket expenses Medicare Advantage beneficiaries have to pay. The average premium for Medicare Advantage is currently $18 per month, making these Medicare plans affordable for most.
Enrollment periods for Medicare Advantage plans are limited, but there are several windows of opportunity if you missed the Initial Enrollment Period when you first signed up for Medicare. For example, there is a Special Enrollment Period for beneficiaries who missed enrollment due to natural disaster or another qualified emergency.
Medicare Advantage Eligibility Requirements
Eligibility for Medicare Advantage requires you to be enrolled in Original Medicare, (which is Medicare Parts A and B) and reside within a plan’s service area. Generally, Medicare beneficiaries must be 65 years old or older. There are exceptions for people under this age who are living with a disability.
Once you’ve enrolled in Medicare Advantage, you’ll have to pay two separate premiums:
- Medicare Part B premium
- Medicare Advantage premium
For Medicare Advantage, your monthly premiums will vary based on the plan you choose. Available plans include:
- HMO (Health Maintenance Organization)
- PPO (Preferred Provider Organization)
- SNP (Special Needs Plan for beneficiaries with chronic health conditions)
- PFFS (Private Fee-for-Service)
- MSA (Medicare Savings Account)
In some cases, you may not have to pay a Medicare Part B premium or Medicare Advantage premium. Avoiding a monthly premium may be possible for a beneficiary at a lower income level.
Further, if you have pre-existing medical conditions, neither your Medicare Advantage nor your Medicare Part B premiums can charge you more to cover those conditions. As long as you maintain Original Medicare (which includes Medicare Part A and Part B coverage), you cannot be denied Medicare Advantage.
What Are the Medicare Income Limits?
Technically, there are no income limits to Medicare or Medicare Advantage plans. You are eligible for Medicare coverage regardless of your annual income. However, higher premium costs do exist for beneficiaries with higher income.
Further, if you have limited income, you may qualify for Medicaid or a Special Needs plan. To learn more about this option, you can contact your state’s Medicaid office or the Social Security office.
How Monthly Income Affects Medicare Part B Premiums
While Medicare Advantage plans are not based on income, the dollar amount of your Medicare Part B premiums are derived from your modified adjusted gross income according to your tax return.
As of 2023, standard Medicare premiums for Part B are $164.90 per month. For individuals earning more than $97,000 annually, the premium will go up by 40% to $230.80. For married couples, the Medicare income limits are higher, and you won’t have to pay more for a Medicare Part B premium unless your income exceeds $194,000.
The higher your adjusted gross income, the amount beneficiaries pay for Part B Medicare benefits rises. For example, higher-income beneficiaries in the top income brackets can pay 240% more than the stated premium.
This additional premium is referred to as an income-related monthly adjustment amount (IRMAA for short). The dollar amount is determined each year by the Social Security Administration. Beneficiaries who believe their modified adjusted gross income was calculated incorrectly in determining Part B costs, can file premium appeals.
Alternatives to a Medicare Advantage Plan
Nearly half of Medicare beneficiaries have a Medicare Advantage plan, but Medicare Advantage is not necessarily the best approach for everyone.
For example, most beneficiaries with a Medicare Advantage plan can only seek medical treatment within the plan’s network. If you go outside of this network, you could be on the hook for 100% of your medical expenses. You will also likely need to get a referral from your primary care physician before seeing a specialist, which can unduly delay care and adversely affect your health.
The restrictive coverage network and referral requirements steer some beneficiaries toward alternatives to Medicare Advantage plans, such as Medicare supplement insurance (referred to as Medigap). These plans can be used with any doctor who takes Medicare.
How to Get Assistance Paying for Medicare Advantage
If you don’t qualify for Medicaid, you may be eligible for Medicare Savings Programs, called MSPs for short.
There are four types of Medicare Savings Programs available to beneficiaries:
- Qualified Medicare Beneficiary Program
- Specified Low-Income Medicare Beneficiary Program
- Qualifying Individual Program
- Qualified Disabled and Working Individuals Program
Being eligible for one of these programs helps pay Medicare Part B premiums and other costs, such as coinsurance, copayments, and deductibles.
Even though you can’t be denied Medicare Advantage based on income, you may find that Medicare premiums increase with inflation or income changes. If you’re concerned about how your income affects your Medicare plan premium, please contact a Medicare Advantage specialist to learn more about your options.