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What Is the Medicare Giveback Benefit and How Can It Save You Money?

A senior couple reviewing Medicare Giveback Benefits.

If you’re enrolled in a Medicare Advantage plan, you may qualify for special savings through the Medicare Giveback Benefit. This benefit allows your Medicare Advantage plan provider to pick up the cost of some or all of your Part B monthly premium. You don’t actually get anything back, but you can still benefit from savings on Medicare coverage if you qualify.

Confused about Medicare enrollment? A financial advisor can help you navigate the maze.

Understanding the Medicare Giveback Benefit

The Medicare Giveback Benefit is a special benefit associated with Medicare Advantage plans. Medicare recipients who qualify for this benefit can get some or all of their Part B premiums paid by their plan provider.

Now, it may be necessary to backtrack a little and explain how Medicare Advantage plans work. When you enroll in Medicare for the first time or change your plan during the fall open enrollment period, you’ll be able to choose from two options:

Original Medicare offers hospital insurance through Part A and medical insurance through Part B. When you need care, you pay a deductible and coinsurance while Medicare pays for its share of approved costs. Prescription drug coverage is available through Medicare Part D.

With Medicare Advantage plans, you’re covered through a private company that’s approved to contract with Medicare. Medicare Advantage plans include Parts A and B coverage, and Part D prescription drug coverage is usually built-in as well.

Only Medicare Advantage plans qualify for the Medicare Giveback Benefit. If you’re interested in taking advantage of this benefit but you’re currently enrolled in Original Medicare, you’d need to change your plan during open enrollment.

How the Medicare Giveback Benefit Works

The giveback benefit works by reducing Medicare Part B premiums for eligible Medicare recipients. When you enroll in a Medicare Advantage plan that participates in the giveback program, you’re automatically eligible. Your plan provider will coordinate with the Social Security Administration to apply your premium reduction, assuming that you pay Part B premiums from your Social Security benefits.

There may be a waiting period for the giveback benefit to kick in. If you’re eligible, then the benefit applies beginning with the same month that your Medicare Advantage plan takes effect. However, there might be some lag time before you see any reduction in your premiums. Once your premiums are reduced, any overpayments are credited back to you.

So, how much can you save with the Medicare Giveback Benefit? The answer ultimately depends on which Medicare Advantage plan you’re enrolled in and where you live. With some plans, the reduction may only be a difference of a few dollars a month. Other plans, however, may shrink your premium costs down to nothing or almost nothing.

Who Is Eligible for the Medicare Giveback Benefit?

Senior getting prescription drugs at home.

Unlike other Medicare benefits, like Medicare Savings Programs or Extra Help, the criteria to qualify for the giveback benefit is fairly straightforward. To be eligible, you must:

  • Be enrolled in a Medicare Advantage plan
  • Pay Part B premiums from your Social Security benefits
  • Live in a giveback benefit coverage area

Many of the largest insurers that contract with Medicare offer the giveback benefit. However, whether you can take advantage of it will depend on whether your provider extends the benefit to your service area. A quick phone call to your current Medicare Advantage plan provider should be able to tell you if giveback benefits are available where you live.

Is It Worth Changing Medicare Plans to Qualify for the Giveback Benefit?

If you’re currently enrolled in Original Medicare, making the move to a Medicare Advantage plan could potentially save you money if you’re eligible for giveback benefits. However, it’s important to consider other factors when deciding whether it makes sense to switch plans.

For example, here are f helpful questions to ask to evaluate your current plan vs. a new one:

  • How much are you currently paying for premiums with Original Medicare and what would you pay with Medicare Advantage?
  • What would you pay for copays, deductibles or coinsurance with a Medicare Advantage plan?
  • Does the Medicare Advantage plan you’re weighing offer giveback benefits?
  • If so, how much is the benefit?
  • Would making a move to a new plan require you to change doctors or health care providers?

A sizable reduction in Part B premiums could make switching to a plan that offers the Medicare Giveback Benefit more attractive. However, it’s important to choose a plan that checks off all of your personal boxes when it comes to coverage and cost.

Other Ways to Save With Medicare Advantage

If you’re interested in Medicare Advantage but don’t qualify for a giveback benefit, you might consider a Medicare Medical Savings Account (MSA) instead. These plans combine a high-deductible health insurance plan with a medical savings account. They’re similar to Health Savings Accounts (HSAs) but are designed specifically for Medicare recipients.

Choosing a high-deductible health plan can mean paying a larger amount out of pocket before Medicare starts to pay for care. However, the savings account component can give money back to you. Medicare gives your plan money, which is then deposited into your MSA at the beginning of each calendar year. You can then use those funds to pay Medicare-covered costs before meeting your annual deductible.

There are some restrictions on who can join an MSA. You’re not eligible if you:

  • Have health coverage that would cover your MSA deductible, which can include any benefits you get from an employer or union retirement plan.
  • Joined another Medicare Advantage plan.
  • Receive TRICARE benefits from the Department of Defense or Department of Veterans Affairs.
  • Retired from the federal government and are part of the Federal Health Benefits Program.
  • Are eligible for Medicaid or are currently receiving hospice care.
  • Live outside the U.S. for more than 183 days in a year.

If you qualify, you can choose any doctor and you don’t need a referral to see a specialist. You will, however, need to get Medicare Part D separately for prescription drug coverage.

Bottom Line

Senior getting medical services at home.

The Medicare Giveback Benefit could help to lower your Part B premiums, though not everyone is eligible. If you’re enrolling in Medicare for the first time it may help to talk to a financial advisor about your options. An advisor can help you make sense of the differences between Original Medicare and Medicare Advantage plans to help you decide which one might be right for you.

Retirement Planning Tips

  • Medicare is just one of the things you’ll need to figure out when planning for retirement. You’ll also need to think about when to claim Social Security benefits and what to include in your estate plan. Those are all things that a financial advisor can help you with. If you don’t have an advisor yet, finding one doesn’t have to be complicated. With SmartAsset’s financial advisor matching tool, you can get personalized advisor recommendations in minutes. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now
  • If you need assistance with covering prescription drug costs, you may want to look into Medicare Extra Help. The Extra Help program provides people with limited income or financial resources help in paying Part D drug costs. Some people, including those who are covered by Medicaid, are automatically eligible while others will need to apply for benefits.

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