Your SSDI payment and your Medicare premium are separate bills
When you receive Social Security Disability Insurance (SSDI), you become covered by Medicare automatically after you have been on SSDI for 24 months. Medicare has its own monthly premiums—charges you pay to keep your coverage active. These premiums come out of your SSDI check each month, which means your actual SSDI payment is reduced by the amount Medicare costs.
The amount you pay depends on which parts of Medicare you use and your income level. Most people on SSDI pay for Part B (doctor visits and outpatient care) and Part D (prescription drugs). Some also pay for Part A (hospital care), though many people on SSDI do not pay a Part A premium because they have worked enough to earn it.
Understanding how much will be deducted from your check before you receive it helps you plan your budget and know what to expect when your first SSDI payment arrives.
Key Takeaways
- Medicare premiums are deducted directly from your SSDI payment each month, so you receive less cash than your benefit amount.
- Part B premiums change each year and are based partly on your income from two years prior, so your premium may increase or decrease.
- If your income is very low, you may be able to get help paying your premiums through Medicaid or other information programs.
- You can see your exact premium amount on your Medicare Summary Notice, which arrives in the mail each fall.
What Medicare parts cost and who pays
Most people on SSDI pay for Part B and Part D. Part B covers doctor visits, lab work, and outpatient services. Part D covers prescription drugs. The Part B premium for 2024 is $164.90 per month for most people, though it can be higher if your income was above a certain level two years ago. Part D premiums vary by plan and insurance company, typically ranging from $7 to $100 per month depending on which plan you choose.
Part A, which covers hospital stays, usually has no monthly premium if you worked long enough before becoming disabled. You can check your Part A status on your Medicare card or by calling Medicare at 1-800-MEDICARE.
If you have very low income, you may not owe the full Part B premium. Medicaid can pay part or all of your Medicare premiums if you meet your state's income limits. Each state sets its own limits, so what qualifies in one state may not in another. You explore for this help through your state Medicaid office, not through Medicare.
How income affects your premium amount
Your Part B premium is based on your income from two years before the current year. This is called Modified Adjusted Gross Income (MAGI). If your income was higher two years ago, you pay a higher premium now. If your income drops, your premium will decrease—but only after a two-year delay.
For example, if you are receiving a premium notice in 2024, it is based on your 2022 income. If your income was $50,000 in 2022 but is only $20,000 in 2024, you still pay the higher premium until 2026, when your 2024 income is used to calculate your rate.
If your income drops significantly—because you lost a job, a spouse passed away, or you had a major life change—you can ask Medicare to recalculate your premium right away. You will need to report the change and provide proof, such as a tax return or a letter from your employer. Call 1-800-MEDICARE to request a recalculation.
When premiums are deducted from your SSDI check
Medicare premiums come out of your SSDI payment automatically each month. The Social Security Administration deducts the amount before sending you your check. If you receive your SSDI by direct deposit, the reduced amount goes into your bank account. If you receive a paper check, the amount shown on the check already has the premium subtracted.
Your first SSDI payment after you become Medicare-covered will show the deduction. You will receive a notice from Social Security explaining the deduction before it happens, so you will know what to expect. If the deduction seems wrong, contact Social Security at 1-800-772-1213 to ask about it.
If your SSDI payment is very small and your Medicare premium is large, your SSDI payment could be reduced to zero. In that case, you still have Medicare coverage, but you will receive no SSDI cash. You would then owe your Part D premium separately if you want prescription drug coverage.
Reviewing your premium on your Medicare Summary Notice
Every fall, Medicare sends you a Medicare Summary Notice in the mail. This notice shows your current premiums for the coming year, any changes from the previous year, and the date your new premiums take effect. It also explains why your premium changed, if it did.
Read this notice carefully. If your premium increased and you do not understand why, the notice will tell you how to contact Medicare. If you believe the increase is wrong—for example, if your income dropped but Medicare is still charging you the higher rate—you can request a recalculation by calling 1-800-MEDICARE.
Keep your Medicare Summary Notice with your other important papers. You will need it if you have questions about your coverage or if you need to prove your Medicare status to a doctor or pharmacy.
Getting help paying your premiums
If your income is low, Medicaid may pay some or all of your Medicare premiums. This program is called Medicare Savings Programs in some states. You do not have to be on Medicaid to use it—you only need to meet the income limit, which is usually around 135% to 200% of the federal poverty level, depending on your state.
To learn about you may have access to, contact your state Medicaid office. You can find the phone number by calling 1-800-MEDICARE or visiting Medicare.gov. You will need to provide proof of income, such as your most recent SSDI statement or tax return.
Some nonprofits and community organizations also help people on SSDI pay for Medicare costs. Your local Area Agency on Aging can point you toward these resources. You can find your local agency by calling the Eldercare Locator at 1-800-677-1116.
What happens if you do not pay your premium
If your premium is not deducted from your SSDI check—for example, if your SSDI payment is too small to cover it—you will receive a bill from Medicare. You have a grace period to pay, usually about three months. If you do not pay within that time, your Medicare coverage can be suspended.
If your coverage is suspended, you will not be able to use it until you pay what you owe. This can be a serious problem if you need medical care. If you cannot pay your premium, contact Medicare right away at 1-800-MEDICARE to discuss payment options or to ask about programs that can help you pay.
Frequently Asked Questions
Can I choose not to have Medicare taken out of my SSDI check?
No. Once you become covered by Medicare after 24 months on SSDI, the premiums are deducted automatically. However, you can choose which Medicare plans you want—for example, you can decline Part D if you do not take prescription drugs, though you may face a penalty later if you enroll in it later.
What if my SSDI payment is smaller than my Medicare premium?
Your SSDI payment will be reduced to zero, and you will owe the remaining premium separately. Contact Medicare to set up a payment plan or to ask about information programs. You will still have Medicare coverage even if you are not paying the premium at that moment, but your coverage can be suspended if you fall too far behind.
Why did my Medicare premium increase when my income did not?
Your premium is based on your income from two years ago, not your current income. If your income was higher two years ago, your premium will be higher now. You can request a recalculation if you had a major life change, such as a job loss or death of a spouse, by calling 1-800-MEDICARE.
Do I have to pay for Part A if I am on SSDI?
Most people on SSDI do not pay a Part A premium because they earned enough work credits before becoming disabled. You can check your Part A status on your Medicare card or by calling 1-800-MEDICARE. If you do owe a Part A premium, it will be deducted from your SSDI check along with your Part B premium.
How do I know if Medicaid can help me pay my premiums?
Contact your state Medicaid office to find out your income limit and how the process works. You can find the phone number by calling 1-800-MEDICARE. The income limit varies by state, but it is usually between 135% and 200% of the federal poverty level. You will need to provide proof of your current income.