July 21st 2022
By Ari Parker
The Medicare Give Back Benefit can be incredibly enticing, because it sounds like free money. So, what’s the catch? Learn about the details of this benefit, including its limitations and drawbacks.
The Medicare give back benefit can be incredibly enticing because it sounds like free money. So, what's the catch?
The Medicare Part B give back benefit is another name for a Part B premium reduction, which is offered as a benefit by some Medicare Advantage plans. The premium reduction allows insurance companies to cover part of your monthly Part B premium, reducing how much you pay for Medicare each month.
Medicare has a monthly Part B premium of $185 in 2025. For most people, this amount comes directly out of their Social Security check. If you haven't started receiving Social Security benefits yet, you pay this premium separately each month.
Medicare Advantage plans are offered by private insurance companies that contract with the government to provide Medicare benefits. Medicare pays Medicare Advantage plans a set rate per person. This set rate is the benchmark. Each year, plans submit “bids” that represent their estimated cost of providing Medicare Part A and Part B coverage to beneficiaries.
If a plan’s bid is below the benchmark (and the majority of bids are), then the plan keeps part of the difference between the benchmark and its bid. Plans must use this rebate to lower patient costs or provide benefits that are not included as part of Original Medicare (Part A and Part B).
When the insurance company saves money by providing care for less than the federal Medicare program can, the company receives rebates from the government. They can use the rebates to fund additional services such as free gym memberships, vision, dental, and hearing coverage, OTC cards, or other programs. They can also use the rebate to reduce beneficiaries costs—which is why we see Part B premium reductions.
The Part B give back is a way for Medicare Advantage plans to be competitive and attract enrollees by offering a significant financial incentive. Different plans use different methods to figure and distribute the savings.
If you’ve seen ads claiming you’re missing out on payouts that range from $144 to $800, you may wonder how the benefit works. First, the rebate cannot exceed the Part B premium, so in 2025, it cannot be higher than $185.
Some give back programs may offer major Part B premium reductions as a perk of their plan. Depending on your Medicare Advantage plan, your Part B premium may be less than $185 because the rebate was applied. As a result, your Social Security check might increase by a few dollars.
You will not receive a separate rebate check every month or every year. If you pay the premiums out of pocket, the give back will lower your payments.
While the give back benefit was first introduced in 2003, Google Trends data shows a significant spike in searches for the Part B give back benefit since 2020. Forbes also reported on increased interest in the benefit back in 2020.
While there are several potential causes for the benefit's rise in popularity, it's hard to ignore the timing. The benefit reached peak popularity in 2020, the same year that the COVID-19 pandemic devastated the economy. The pandemic resulted in a lot of economic uncertainty, which is often paired with penny-pinching.
The Medicare give back benefit isn't available to every Medicare beneficiary. Let's take a look at the eligibility requirements.
Premium reductions are only available with Medicare Advantage plans, also called Medicare Part C plans. These plans cover the same services as Original Medicare (Part A & B), often with additional benefits, including the give back benefit. This means that Medicare beneficiaries who choose to stay on Original Medicare, even with a Medicare Supplement (Medigap) plan, do not have access to plans with premium reductions.
Medicare Advantage plan availability varies by ZIP code, and so does access to plans with a give back benefit. A Medicare agent near you can help you identify the available Medicare plans in your service area, including those with premium reductions.
Life's all about give and take. If you're eligible and find a Medicare Advantage plan with premium reductions available to you, consider the benefits and drawbacks before enrolling. Don't forget to check all the details of your costs and coverage to learn what you and the insurance company will give and take.
This simply means that if your premiums are covered by a state or local program, you won't qualify for a plan with a give back benefit.
When it comes to the monthly Medicare costs, most people would like to save a few dollars on premiums. However, the give back benefit may come at a cost—and the possibility of givebacks should not be the only thing to consider when choosing a plan.
Below are questions you should ask to avoid the give back benefit costing you something you can't afford to lose:
Are your preferred doctors in-network? What do you have to pay for out-of-network providers?
Are your prescription drugs covered at nearby pharmacies?
What is the difference in copay amounts when you use services?
Are the services you need covered?
What is the annual out-of-pocket maximum for the year?
What are the premiums, coinsurance, deductibles, and giveback benefits outlined in the plan matter, as well as any out-of-pocket costs you may expect to pay?
Medicare Advantage plans are set up as HMOs or PPOs, which contract with certain providers. If the doctors you have seen for years for specific conditions are not on the plan you choose, you will have to change providers or pay more for out-of-network providers.
By paying attention to all of these details, you'll find that oftentimes, a singular focus on premiums can cost you more in the long run. Add in the fact that insurance companies can change their premiums and benefits each year, and it generally makes sense to focus on your coverage and out-of-pocket costs versus the premiums you pay monthly.
Despite limitations and drawbacks in plans with a give back program, the benefit has risen in popularity in the past few years.
You can enroll in a Medicare Advantage plan during specific enrollment periods, including:
Initial Enrollment Period: 3 months before your 65th birthday, the month you turn 65, and 3 months after
Annual Enrollment Period (AEP): October 15th to December 7th each year
Medicare Advantage Open Enrollment Period (MA OEP): January 1st to March 31st each year
Learn more about when you can change Medicare plans.
Are you wondering if a Medicare Advantage plan is right for you? One of our Advisors can help you understand the benefits of the different Medicare plans available to you.
The easiest way to find a plan with a give back benefit is to reach out to a Chapter Medicare Advisor, who will compare all plans available to you and help you choose the best one for your needs.
Interested in learning more about your Medicare options? Give us a call at 855-900-2427 or choose a time to talk to an agent to get more out of your Medicare.
