When a Medicare Part B beneficiary dies, his or her estate or surviving family members may be entitled to a refund or monthly Medicare Part B premiums previously paid. This column explains what the estate or surviving family members need to do in order to get a refund of previously paid monthly Medicare Part B premiums.
It is important to first present some background information about Medicare Part B payments.
When an individual first becomes eligible at age 65 and enrolls in “Original Medicare” – Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) – he or she must pay a monthly premium for Medicare Part B. There is no premium cost for Medicare Part A. This is because Medicare Part A premiums have been prepaid during an individual’s working years via the Hospital Insurance Tax (HIT). If an individual has paid the HIT during any 10 years of lifetime his or her employment years, then there is no Medicare Part A monthly premium cost when the individual enrolls in Medicare Part A.
However, there is a monthly premium for Medicare Part B. The amount of monthly Medicare Part B depends on the individual’s income, specifically the individual’s modified adjusted gross income (MAGI). The higher the MAGI, the higher the monthly Medicare Part B premium. If the individual is receiving Social Security benefits, the Medicare Part B premium is deducted from the individual’s monthly Social Security benefit payment
If a Medicare Part B beneficiary has not yet filed for his or her Social Security monthly retirement benefit check, he or she must pay in advance the Medicare Part B premiums directly to the Centers for Medicare and Medicaid Services (CMS) on a quarterly basis. During 2024, most Medicare Part B beneficiaries pay $174.70 per month. However, some Medicare Part B enrollees pay much more in monthly premiums based on their higher income.
Higher income Medicare Part B beneficiaries with adjusted gross incomes above $103,000 or married couples with joint income above $206,000, as reported on their 2022 federal income tax returns, are subject to monthly surcharges known as income-related monthly adjustment amounts, or IRMAA. IRMAA surcharges are also subtracted from monthly Social Security benefit payments.
Learn more about your retirement benefits at our No-Cost webinars, featuring Ed Zurndorfer -
Understanding When Social Security Benefits Are Received and When Medicare Part B Premium Payments Are Paid and Applied
While the following discussion is somewhat complicated, Social Security and Medicare Part B beneficiaries need to understand how and when their Social Security payments are earned and received, respectively, and need to understand when their Medicare Part B premiums are paid and applied, respectively.
In short, Social Security monthly retirement benefits are earned in arrears. Medicare Part B premiums (including IRMAA surcharges) are paid in advance. The following example illustrates:
Geoffrey, age 68, received his earned May 2024 Social Security monthly retirement benefit in June 2024. The Medicare Part B premium deducted from Geoffrey’s June 2024 Social Security check applies to eligible Medicare Part B benefits occurring in July 2024. Geoffrey suddenly died on July 6, 2024. His Medicare Part B monthly payment made in June 2024 was clearly an overpayment for Geoffrey’s Medicare Part B coverage during the period July 7 through July 31 because he died on July 6. Geoffrey’s estate is therefore entitled to a refund of the “unused” premiums resulting from Geoffrey’s death on July 6, 2024.
If the Medicare Part B beneficiary died in the month in which a Social Security retirement benefit was paid, then the estate is entitled to a refund of all the Medicare Part B premium deducted from that month’s Social Security monthly benefit payment. For example, if Geoffrey had died on June 29, 2024, his estate would have been entitled for all the Medicare Part B premiums deducted from Geoffrey’s June 2024 Social Security payment.
For individuals who pay their Medicare premiums directly to the CMS on a quarterly basis, it could mean several months of prepaid, unused Medicare Part B coverage.
The estate of the deceased Medicare Part B beneficiary is legally entitled to a refund of the prepaid Medicare Part B premiums, but it is not automatic. The deceased’s family or personal representative must proactively contact their Social Security office and specifically request a refund. Alternatively, they can file Form SSA-1724 (Claim for Amounts Due to the Case of Deceased Beneficiary) which can be downloaded at: https://www.ssa.gov/forms/ssa-1724.pdf. A portion of Form SSA-1724 is presented here:
You Might Also Enjoy This Podcast
Ed Zurndorfer, EA, ATA, CFP®, CLU®, ChFC®, CEBS®, ChFEBC℠: Federal Employee Benefits Expert
A former career Federal employee, Ed has published a staggering 1,200+ separate articles on Federal Benefits and Retirement!
Just “Google” his name, and you are likely to find a plethora of sites that contain his writings. Drawn to its mission to reach, teach
and serve Feds, Serving Those Who Serve is the only financial planning practice with which Ed has chosen to affiliate in over
20 years teaching. In addition to conducting Federal Benefits seminars for Serving Those Who Serve, you can find Ed’s
writings here on our blog in the FedZone, and on Fed-Soup, MyFederalRetirement, FederalNews Radio and NITP.
He is a member of the Maryland Society of Accountants, the National Association of Enrolled Agents, the International Society of Certified Employee Benefits Specialists, the Financial Planning Association, the National Association of Health Underwriters,
and the Society of Financial Service Professionals. Since 1999, Ed has taught many thousands of Federal employees about
their benefits, in person and at Federal agencies all over the country. Ed is a true national treasure.
Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, and EZ Federal Benefits Seminars, located at 833 Bromley Street - Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.
