Sometimes your newly-chosen Medicare plan does not have enough time to organize the automatic premium deduction from your Social Security check, resulting in a 3+ month delay in premium payments - so instead, your Medicare plan will ask that you pay your premium directly until the automatic Social Security deductions can be arranged.

Question: How does this happen?

Often when enrolling late in the enrollment period, for example on December 6th, even though you have selected the option to have your monthly plan premiums automatically deducted from your Social Security check, you may receive a letter from the Social Security Administration stating something such as:

"We will no longer deduct money for your Medicare prescription drug plan costs from your monthly benefits."

The Social Security letter may go on to note:

"If you have any questions about your Medicare prescription drug plan costs, please contact your Medicare prescription drug plan."

If you receive such a letter, your Medicare plan will assign an alternate payment method such as issuing a coupon payment book, sending a direct bill, or providing another method of paying your monthly premiums. 

After the start of your new Medicare plan coverage (for example January 1st), you can contact your Medicare plan and change how your monthly premiums are paid and you may be able to, once again, request automatic premium deduction from your Social Security check.  (To contact your Medicare plan's Member Services department, please use the toll-free number found on your Member ID card.)

Please remember that it can take the Social Security Administration up to three (3) months to process your premium change.

Question: What is the source of this premium-payment policy?

The Centers for Medicare and Medicaid Services (CMS) published revised guidance in May 2019 entitled, "Withholding Medicare Prescription Drug Premium from Your Social Security Payment" that outlines why some people are being denied automatic Social Security check deductions as their chosen form of premium payment.

The CMS document states that if you make a Medicare plan change, "[d]epending on when you made your enrollment decision, you may be asked to pay your new plan directly for a while. If that happens, you’ll get a bill or payment book from your new drug plan telling you the amount you owe. Your new plan will expect you to pay premiums directly until premium withhold is started with your new plan. You may need to contact the plan to let them know you still want to have your premiums withheld."

The CMS document continues with an example:

“You enrolled at the end of Open Enrollment and chose to have your premiums withheld from your Social Security payment. However, you just got a payment book from your drug plan saying you owe $36.50 each month, starting in January. You call the plan, and the plan says that it didn’t get your request for enrollment in time to arrange for your January premium to be withheld. The plan says it will request to have the premiums withheld from your Social Security payment starting in February. You’ll need to send your premium payment for January directly to your plan.”

So some Medicare plans may not allow Social Security check premium deduction at the start of the year, although this was the chosen payment option on their enrollment application.

Instead, Medicare plan members were told to either send the first premium payment by check or submit the Electronic Funds Transfer request.  When contacted, the Medicare plan Member Services representatives said that they would be send the forms to request the Social Security payment option - as per the CMS guidance.

Question: If my Medicare plan changed my premium payment method against my wishes, what happens if I don't pay the bill?

You could be involuntarily disenrolled from your Medicare plan.  And if you are disenrolled for failure to make your premium payments, you probably will not be able to show "good cause" for reinstatement back into your plan based only on the fact that you chose your premiums to be automatically deducted from your Social Security check.

The CMS Medicare manuals provide the following example about good cause reinstatement based on the plan changing how premiums should be paid:

"Ms. Taylor was disenrolled on March 31, 2015 following a plan’s three month grace period.  She states that when she enrolled in the plan during the fall open enrollment period [AEP], she selected premium withhold [from her Social Security check] as the method of premium payment.

She says that she received a premium bill from the new plan for January and, in addition, received a delinquency notice in early January warning of disenrollment at the end of March if she did not pay the premium for January.

She stated that she ignored the bill and the delinquency notice, assuming that her plan premiums were being withheld from her Social Security benefit check starting with the January premium.

The plan issues an unfavorable good cause determination [and would not reinstate Ms. Taylor into the plan] because the plan explained in its letter to Ms. Taylor following submission of the enrollment transaction and receipt of the [transaction record] that her first month’s plan premium was not withheld, that she was responsible for paying her premiums until premium withholding started and that she could be involuntarily disenrolled.

The plan concluded that Ms. Taylor had been appropriately advised of her obligation to pay the bill for the January premium and that this was reiterated by means of the subsequent premium bills and the delinquency letter the plan sent to her in January.

The plan’s unfavorable determination is appropriate because: 1) The situation (misunderstanding of ramifications of nonpayment of premiums) was not unexpected in any way; 2) The situation did not impede her ability to pay timely; and 3) It is reasonable to expect that Ms. Taylor could have paid or made arrangements to pay the owed amounts within the plan’s grace period.  Ms. Taylor may not be reinstated for good cause."

Sources included:

"Withholding Medicare Prescription Drug Premium from Your Social Security Payment" (Revised May 2019), CMS Product No. 11400

Medicare Prescription Drug Benefit Manual, Chapter 3 - Eligibility, Enrollment and Disenrollment, Section 60.2.4 - Reinstatements Based on a Determination of Good Cause for Failure to Pay Plan Premiums or Part D-IRMAA Timely (and Appendix 4 for examples), Updated: August 19, 2011, (Revised: November 16, 2011, August 7, 2012, August 30, 2013, August 30, 2014, July 6, 2015, September 1, 2015, September 14, 2015 & December 30, 2015, May 27, 2016, August 25, 2016, June 15, 2017, July 31, 2018, August 12, 2020 & August 15, 2023)