Medicare premiums and costs on SSDI

When you receive SSDI, you become covered by Medicare automatically after you have been receiving benefits for 24 months. Most people on SSDI pay no premium for Part A (hospital insurance) because they or a family member paid Medicare taxes while working. Part B (medical insurance) does have a monthly premium that comes directly out of your SSDI payment — the amount changes each year and depends on your income.

For 2024, the standard Part B premium is $164.90 per month, but you may pay more or less depending on your income from the previous two years. If your income is below a certain threshold, you pay the standard amount. If it is higher, you pay an additional surcharge called an Income-Related Monthly Adjustment Amount (IRMAA). The Social Security Administration sends you a notice each year showing exactly what you will pay.

Beyond premiums, you also have out-of-pocket costs when you actually use Medicare services. These include deductibles (the amount you pay before Medicare starts paying), copayments (a fixed amount per visit), and coinsurance (a percentage of the cost). The exact amounts vary depending on which part of Medicare you use and what service you receive.

Key Takeaways

  • Part A (hospital insurance) is free for most people on SSDI because they paid Medicare taxes while working.
  • Part B (medical insurance) costs $164.90 per month in 2024 for most people, but the amount increases if your income is above certain thresholds.
  • Your Part B premium is automatically deducted from your monthly SSDI payment, so you do not receive a separate bill.
  • You will also pay deductibles, copayments, and coinsurance when you use Medicare services, which vary by service type.
  • Social Security sends you a notice each year showing your exact premium amount and any income-based adjustments.

How your Part B premium is calculated

Social Security looks at your income from two years before the current year to decide your Part B premium. Income includes wages, self-employment earnings, interest, dividends, and certain other sources. If your income stays below the threshold for your filing status, you pay the standard premium. If it exceeds the threshold, you pay the standard amount plus an additional surcharge.

The income thresholds change each year. For 2024, if you file as single and your income is above $97,000, you begin paying extra. If you file as married filing jointly, the threshold is $194,000. These thresholds are adjusted annually for inflation. If your income drops — for example, because you stopped working or had a significant life change — you can request that Social Security recalculate your premium based on your current year income instead of the prior two years.

The surcharge can be substantial. In 2024, depending on your income level, you could pay anywhere from the standard $164.90 up to $560.50 per month for Part B. Social Security will notify you in writing if you owe an IRMAA surcharge, and the notice will explain exactly how much and why.

What Part A and Part B actually cover

Part A covers inpatient hospital stays, skilled nursing facility care (after a hospital stay), hospice care, and some home health services. When you use Part A, you pay a deductible for each benefit period — in 2024, that is $1,632 for a hospital stay. After you meet the deductible, Medicare covers most of the cost, though you may owe coinsurance for stays longer than 60 days.

Part B covers doctor visits, outpatient services, medical equipment, and preventive care. You pay a $240 deductible per year in 2024, then typically 20 percent of the cost after that. Some preventive services, like annual wellness visits and certain screenings, are covered at no cost to you after you meet your deductible.

Neither Part A nor Part B covers dental care, vision care, hearing aids, or long-term custodial care in a nursing home. Many people on SSDI add Medicaid (a separate program run by states) to cover some of these gaps, or they purchase a Medigap policy (private insurance that covers some of Medicare's out-of-pocket costs).

Medicaid and SSDI: a second layer of coverage

If your income is very low, you may also be covered by Medicaid, your state's health program for people with low income. Medicaid can pay your Part B premium for you, cover your deductibles and copayments, and pay for services Medicare does not cover, like dental and vision care. Whether you are covered by Medicaid depends on your state's rules and your income level.

Some states use the federal poverty level to decide Medicaid coverage; others set their own limits. A few states have not expanded Medicaid at all. You can find out whether you may be covered by contacting your state Medicaid office or using the Medicaid.gov website to locate your state program.

If Medicaid pays your Part B premium, Social Security still deducts it from your SSDI check, but Medicaid reimburses you for it. This means your net SSDI payment stays the same. Medicaid can significantly reduce your out-of-pocket costs, so it is worth checking whether you may have access to.

When your Medicare costs change

Your Part B premium can change each year because the standard premium amount is recalculated annually. Social Security sends you a notice in October or November showing your premium for the following year. If you disagree with the amount or believe your income has changed significantly, you have a window to request a reconsideration.

Your out-of-pocket costs (deductibles, copayments, and coinsurance) also change annually. Medicare publishes these amounts each January. If you use multiple doctors or services, tracking these costs throughout the year can help you budget. Many people on SSDI find it helpful to ask their doctor's office about costs before scheduling procedures.

If you experience a major life change — such as a job loss, divorce, or death of a spouse — you may be able to request that Social Security recalculate your IRMAA surcharge based on your current income rather than waiting for the annual adjustment. You will need to provide documentation of the change.

Reducing your out-of-pocket costs

Beyond Medicaid, there are other programs that can help reduce your Medicare costs. The Medicare Savings Program is run by your state and helps pay your Part B premium, deductible, and coinsurance if your income is slightly above the Medicaid limit. Income limits vary by state, but generally you must have income below 200 percent of the federal poverty level.

The Extra Help Program assists people with low income who have Part D prescription drug coverage. It can reduce or eliminate your monthly premium and lower your out-of-pocket costs for medications. You can explore through Social Security or Medicare.

Some people on SSDI also consider Medicare Advantage plans (Part C), which are offered by private insurance companies approved by Medicare. These plans cover everything Original Medicare covers and often include dental, vision, and hearing benefits. However, they typically have higher out-of-pocket costs when you use services, so they work better for people who do not use many medical services.

Frequently Asked Questions

Does my Part B premium come out of my SSDI check before or after I receive it?

Your Part B premium is deducted from your SSDI payment before you receive it. Social Security automatically withholds the amount and sends it to Medicare. You will see the deduction on your payment stub, and your actual deposit will be your SSDI amount minus the premium.

What happens if I cannot afford my Part B premium?

If your income is very low, Medicaid or the Medicare Savings Program may pay your premium for you. Contact your state Medicaid office or call 1-800-MEDICARE to find out whether you may have access to. If you are having temporary hardship, you can also contact Social Security to discuss your situation.

Can I drop Part B to save money?

You can drop Part B, but it is usually not recommended. If you drop it and later want to re-enroll, you will pay a permanent penalty on your premium for as long as you have Medicare. The penalty is 10 percent for each full year you were not covered. It is generally cheaper to keep Part B even if you do not use it frequently.

Do I pay the same Part B premium as someone who is not on SSDI?

Yes, the Part B premium is the same for everyone on Medicare, regardless of whether they receive SSDI. However, your income may be lower than someone who is working, so you may be less likely to pay an IRMAA surcharge. The premium amount itself does not change based on your SSDI status.

What if my income changes after Social Security calculates my IRMAA?

If you experience a major life event — such as retirement, job loss, or death of a spouse — you can request that Social Security recalculate your IRMAA based on your current year income. You will need to provide documentation of the change. Contact Social Security to file a request for reconsideration.