As we navigate the later stages of life, financial stability can sometimes become a concern, especially when our income decreases. If you’re on Medicare, you may worry about how to manage healthcare costs when your financial situation changes. Fortunately, there are several strategies you can use to lower your Medicare expenses and ensure you continue receiving the care you need without straining your budget.

Understand the Income-Related Monthly Adjustment Amount (IRMAA)

One of the first things to consider when your income changes is the Income-Related Monthly Adjustment Amount (IRMAA). IRMAA is an additional charge on Medicare Part B and Part D premiums for individuals with higher incomes. However, if your income has decreased significantly due to retirement, divorce, or other life events, you might be eligible to request a reduction in your IRMAA. To do this, you need to file the Medicare Income-Related Monthly Adjustment Amount - Life-Changing Event Form SSA-44, which you can obtain from the Social Security Administration (SSA).

Explore Medicare Savings Programs (MSPs)

Medicare Savings Programs are state-run programs that can help you pay your Medicare premiums, and in some cases, even cover deductibles, coinsurance, and copayments. There are four types of MSPs:

  • Qualified Medicare Beneficiary (QMB) Program: Covers Part A and Part B premiums, deductibles, coinsurance, and copayments.
  • Specified Low-Income Medicare Beneficiary (SLMB) Program: Covers Part B premiums.
  • Qualifying Individual (QI) Program: Also covers Part B premiums but on a first-come, first-served basis.
  • Qualified Disabled and Working Individuals (QDWI) Program: Covers Part A premiums for certain disabled individuals.

Eligibility for these programs depends on your income and resources, but they can provide significant financial relief. For more information, visit the Medicare Savings Programs page.

Consider Extra Help for Prescription Drugs

If you’re struggling with the cost of prescription drugs, the Extra Help program could be a lifeline. Also known as the Low-Income Subsidy (LIS), this program helps cover Medicare Part D premiums, deductibles, and copayments. Eligibility is based on income and resources, and the program can save you thousands of dollars each year on your prescription medication costs. To apply for Extra Help, you can fill out an application online through the SSA website or contact them directly for assistance.

Review and Adjust Your Coverage Annually

Each year, during the Medicare Open Enrollment Period (October 15 - December 7), you have the opportunity to review and change your Medicare plans. If your income has decreased, this is an excellent time to explore more affordable plan options that better fit your current financial situation.

For instance, you might find that switching to a Medicare Advantage plan could offer lower premiums or more comprehensive coverage for services you need. Alternatively, you could switch to a different Part D plan that covers your prescriptions at a lower cost.

Look into State Pharmaceutical Assistance Programs (SPAPs)

Some states offer State Pharmaceutical Assistance Programs that help residents pay for their prescription drugs. These programs vary by state, but they can be an additional resource if you’re struggling with medication costs. Check with your state’s health department or Medicare office to see if you qualify for any available SPAPs. You can find more information on state prescription drug resources here.

Use Preventive Services to Stay Healthy

One of the best ways to reduce healthcare costs is to stay healthy and avoid the need for expensive treatments. Medicare offers a wide range of preventive services at no cost to you, including screenings, vaccinations, and wellness visits. By taking full advantage of these services, you can catch potential health issues early, manage chronic conditions, and maintain your overall well-being.

Understanding and navigating Medicare costs when your income decreases can be challenging, but you don’t have to do it alone. Consider taking a Medicare-focused class on GetSetUp to learn more about the benefits and programs available to you. These classes can provide you with valuable insights and empower you to make informed decisions about your healthcare.

Reviewed By: Keith Gilbert