The Medicare giveback benefit, also known as the rebate or refund, is money that the government returns to people with Medicare Part B coverage. This benefit was introduced as part of the Affordable Care Act to help offset healthcare costs for Medicare beneficiaries.
Who is eligible for the Medicare giveback?
If you have Medicare Part B coverage, you may be eligible for a Medicare giveback. To qualify, you must meet the following criteria:
- You are enrolled in original Medicare Part B
- You pay the standard Part B premium directly to Medicare or have it deducted from your Social Security check
- Your modified adjusted gross income (MAGI) is below the thresholds set each year by Medicare
If you get Medicare through a Medicare Advantage plan, you will not receive a giveback. The giveback only applies to those with original fee-for-service Medicare Part B.
How does the Medicare giveback work?
Medicare Part B is funded by beneficiary premiums and general tax revenues. When Medicare spends less than expected on healthcare in a given year, the surplus funds are issued as a rebate to certain beneficiaries.
To determine who gets a giveback, Medicare looks at your income from two years prior. If your income was under the specified limits that year, you’ll receive a check in the mail or a direct deposit. The giveback is not taxable and does not need to be reported on your tax return.
Here’s an example: The giveback issued in 2023 will be based on your 2021 income. If your 2021 MAGI was below the threshold set by Medicare that year, you’ll get a rebate in 2023.
What are the income limits to qualify for the Medicare giveback?
Whether you get a Medicare giveback depends on your income from two years prior. Here are the income limits from recent years:
| Year | Individual Income Limit | Married Couple Income Limit |
|---|---|---|
| 2021 | $88,000 | $176,000 |
| 2020 | $87,000 | $174,000 |
| 2019 | $85,000 | $170,000 |
As you can see, the income limits change slightly each year but remain around $85,000-$90,000 for an individual and $170,000-$180,000 for a married couple. The limits are based on your modified adjusted gross income, which includes income from wages, dividends, interest, retirement distributions, and other taxable income sources.
How much is the Medicare giveback?
The amount of the Medicare giveback varies from year to year. It depends on how much Medicare spends under its budget projection. Here are the rebate amounts over the past several years:
| Year | Rebate Amount |
|---|---|
| 2023 | $70* |
| 2022 | $0 |
| 2021 | $148.50 |
| 2020 | $144.60 |
| 2019 | $103.40 |
| 2018 | $0 |
*Estimated amount for 2023
As you can see, the giveback amount has ranged from $0 to about $150 in recent years. The rebate issued in 2022 was $0 because Medicare expenses came in higher than projected the previous year.
When will I receive my Medicare giveback payment?
If you qualify for a giveback based on your income, you’ll automatically receive a payment in the latter half of the year. Here are the recent payment timeframes:
- 2023 giveback: Expected in October – December 2023
- 2021 giveback: Issued July – September 2021
- 2020 giveback: Issued July – September 2020
- 2019 giveback: Issued July – September 2019
The rebate is typically issued during the 3rd quarter of the year. If you’re eligible, you don’t need to sign up or apply for the payment. It will automatically come to you by check or direct deposit.
Will the giveback affect my Medicare benefits?
No, getting a Medicare giveback will not impact your benefits in any way. The rebate is simply a refund of excess funds collected for Medicare Part B coverage. Your Medicare benefits and coverage levels will remain exactly the same.
Do I need to report or pay tax on the Medicare giveback?
The Medicare giveback is not considered taxable income, so you do not need to report it or pay any tax on the payment. The rebate is simply a refund of your Medicare premiums.
How is the giveback different from the Medicare Premium Assistance credit?
The Medicare giveback is different from the Medicare Premium Assistance credit some people receive. Here is how they differ:
- The giveback is based on your income from 2 years ago. The assistance credit is based on your current income.
- The giveback comes as a lump sum check or deposit. The assistance credit reduces your monthly Part B premium.
- The giveback amount varies annually. The assistance credit has set income tiers.
- The giveback does not need to be reported to the IRS. The assistance credit must be claimed on your tax return.
So in summary, the giveback is retrospective based on past income, while the assistance credit is prospective based on present income. Millions get the Medicare giveback each year when issued, while only about 3 million Medicare beneficiaries qualify for the assistance credit.
What should I do if I qualify for a giveback but don’t receive it?
If you think you meet the income requirements for a Medicare giveback but don’t get your payment, you should contact Medicare to check on the status. You can call 1-800-MEDICARE or speak to your local Social Security office for assistance. Some reasons you may miss a rebate payment include:
- Medicare does not have your correct contact or banking information
- You had a major life change like marriage, divorce, or death of a spouse
- You enrolled in Medicare after the eligibility determination period
- You had a change in income sources or deductions
Medicare can help identify why your rebate is missing and get the issue fixed. Be sure to keep your contact details like mailing address and bank account up-to-date so you don’t miss out on any giveback payments you’re entitled to.
Could the Medicare giveback go away in the future?
It’s possible but unlikely that the Medicare giveback could go away. The rebate program is set in law by the Affordable Care Act, so it would take an act of Congress to repeal it. There have been no serious recent proposals to end the giveback.
However, the amount of each giveback could certainly shrink or become $0 in any given year. That’s because the rebate size fluctuates annually based on Medicare’s spending and receipts. If Medicare expenses align closely with income in a year, the surplus funds to refund could become minimal or non-existent.
The giveback has been $0 twice in recent years when Medicare spending aligned tightly with revenues those years. So while unlikely to disappear altogether, the giveback amount may certainly vary or drop to nothing for some years.
Conclusion
The Medicare giveback provides a financial boost to millions of seniors each year it’s issued. Knowing the eligibility requirements, payment timeline, and details around how it works can ensure you receive any rebate you qualify for.
While not a primary source of income, the Medicare giveback can serve as a nice supplemental infusion that helps offset healthcare costs. Just be sure Medicare has your current contact information so any rebate check gets to you without delay.