Medicare does not pay your private insurance premiums, but it can reduce what you owe through cost-sharing programs

Medicare itself does not cover the cost of private health insurance premiums. If you buy a Medigap policy, Medicare Advantage plan, or any other private coverage alongside or instead of Original Medicare, you pay that premium directly to the insurance company. However, if your income is low enough, you may be able to get help paying Medicare's own costs — deductibles, copays, and coinsurance — through programs run by your state. These programs do not pay private insurance companies; they pay Medicare directly on your behalf.

The confusion often comes from mixing two different things: help paying Medicare's costs, and help paying a private insurer's costs. The first exists. The second does not come from Medicare or the federal government.

Key Takeaways

  • Medicare does not subsidize or pay premiums for Medigap, Medicare Advantage, or any other private insurance plan you choose to buy.
  • If your income is below a certain level, your state may help you pay Medicare's own costs — deductibles and copays — through Medicaid or a state program.
  • Some employers continue to pay retiree health insurance premiums after you turn 65, but that is a private arrangement, not a Medicare subsidy.
  • The Part B premium itself (currently $164.90 per month for most people in 2024) is your responsibility unless you may have access to for state cost-sharing help.

What Medicare covers and what it does not

Original Medicare — Part A (hospital) and Part B (doctor visits) — has gaps. You pay a deductible before Medicare starts paying, you pay a percentage of costs after that, and some services are not covered at all. Many people buy a Medigap policy to cover those gaps, or they choose a Medicare Advantage plan (Part C) instead, which is a private plan that replaces Original Medicare.

Neither Medigap nor Medicare Advantage premiums are paid by Medicare. You receive a bill from the insurance company each month, and you pay it. Medicare does not reimburse you, does not send the payment on your behalf, and does not subsidize the cost. The only exception is if your employer continues to pay your health insurance as a retiree benefit — but that is your employer's choice, not a Medicare program.

State programs that help pay Medicare costs

Your state may run a program that helps people with low income pay the costs Medicare itself charges. These programs pay Medicare directly — they cover your Part B premium, your deductible, and your copays. The most common is Medicaid, which exists in every state and covers Medicare costs for people who meet income and asset limits. Some states also run programs called Medicare Savings Programs (MSPs) that are separate from Medicaid but serve the same purpose.

To know whether you may have access to, you need to check your state's income limits. These vary by state and change each year. A local Area Agency on Aging, your state Medicaid office, or a 211 call can tell you the current limits and whether you meet them. If you do, the program pays Medicare directly, and your out-of-pocket costs for Medicare drop significantly.

These programs do not pay private insurance premiums. If you have a Medigap policy and you may have access to for Medicaid, Medicaid will pay your Medicare costs, but not your Medigap premium. You still owe that to the insurance company.

How employer retiree coverage works

Some large employers continue to pay health insurance premiums for retirees over 65. This is a private benefit, not a Medicare subsidy. The employer may pay all or part of the premium for a Medigap plan, a Medicare Advantage plan, or a retiree health plan they sponsor themselves. This arrangement is between you and your employer — Medicare plays no role.

If you have employer coverage, you should check whether it coordinates with Medicare or replaces it. Some employer plans work alongside Original Medicare (like a Medigap plan would), while others are Medicare Advantage plans that replace Original Medicare. Your employer's benefits office can tell you which type you have and what you owe each month.

Part B premium and income-related adjustments

Everyone on Medicare Part B pays a monthly premium. For 2024, the standard premium is $164.90 per month for most people, though the amount changes each year. If your income is higher, you pay a surcharge on top of that — this is called an Income-Related Monthly Adjustment Amount (IRMAA). Medicare does not subsidize this premium for higher-income people; instead, it charges more.

If your income is low, you do not get a subsidy to Medicare itself — instead, you may be able to get help through your state's Medicaid or Medicare Savings Program, as described above. But Medicare does not reduce the Part B premium based on income. The only way to lower what you owe is through a state program.

What to do if you cannot afford your premiums

If you are struggling to pay Medicare costs, the first step is to contact your state Medicaid office or call 211 to ask about Medicare Savings Programs. These programs exist specifically to help people with limited income, and they cover Medicare's costs directly. You can also ask about Medicaid itself if your income is very low.

If you have a private insurance premium you cannot afford — a Medigap or Medicare Advantage plan — you have different options. You can switch to Original Medicare without a Medigap plan (though you will have higher out-of-pocket costs), or you can switch to a different Medicare Advantage plan with a lower premium. You can make these changes during the annual open enrollment period (October 15 to December 7) or if you have a may have access to life event. Contact Medicare directly at 1-800-MEDICARE to discuss your options.

Frequently Asked Questions

If I get Medicaid, does it pay my Medigap premium?

No. Medicaid pays your Medicare costs — the Part B premium, deductibles, and copays. But if you also have a Medigap policy, you still owe the Medigap premium to the insurance company. Medicaid does not cover that.

Does Medicare Advantage cost less because Medicare subsidizes it?

Medicare Advantage plans often have low or zero premiums, but that is because the insurance company receives a payment from Medicare for taking on your care, not because Medicare is subsidizing your premium. You still owe whatever premium the plan charges. Some plans charge nothing; others charge $50 or more per month.

Can I get help paying a private insurance premium if my income is low?

Not through Medicare or a federal program. Your state may help you pay Medicare's own costs through Medicaid or a Medicare Savings Program, but private insurance premiums are your responsibility. If the premium is too high, you can switch plans during open enrollment.

What if my former employer pays my health insurance?

That is a private benefit between you and your employer, not a Medicare subsidy. Your employer decides what to pay and what you owe. Make sure you understand whether your coverage is Original Medicare with a Medigap plan, a Medicare Advantage plan, or a retiree plan your employer sponsors.

Does the Part B premium change if I have low income?

The standard Part B premium is the same for everyone, regardless of income. If your income is low, you may be able to get help paying it through your state's Medicaid or Medicare Savings Program. If your income is high, you pay a surcharge on top of the standard premium.