Question:
I noticed on the Part D enrollment form that there are many different ways to pay our monthly Part D premiums.  Is there one way that is better than the others?

Answer:
As most people know, there are a number of ways for you to pay your monthly Medicare Part D premium -  depending sometimes on your Medicare Part D plan.  Monthly Part D premium payment methods can include:

• Social Security Check Deductions
• Direct deduction from your bank account by "bank draft"
• Mailing in a Check along with a coupon from your Part D plan's Coupon Book
  
• Automatic Credit Card Payment

The Short Answer: There is no one best way to pay your monthly Part D premiums.  However, you may wish to consider paying Medicare Part D premiums with a Check (Coupon Book), Credit Card or Bank Draft to best control your budget.

Although the Social Security check deduction is still preferred by many people, some Medicare Part D beneficiaries have had problems with delayed deduction and reimbursements (some people reported that they still had no SS check deductions as of October).  In addition, some people changing Part D plans were having Monthly premium deductions being collected for both their old and their new Part D plans.  The beneficiaries with these problems noted that it was difficult to find the right person to correct the errors once they occurred.

And a Security Reminder:  No Part D plan collects cash.  And no Agent is permitted to collect monthly premiums at the time of completing the enrollment application.


Here is a little more detail:

Social Security Check Deductions
Earlier in the Part D program we noted that the simplest and probably most preferable way to pay your monthly premium was payment deduction directly from your Social Security check.  The reality proved to be a little different.

One early disadvantage to Social Security check deduction was that it  could take a few months to start making your Part D payments because of application processing.  Some people who did not watch their budget closely spent their Social Security check as usual, thinking that their premium was being withdrawn.  Then, much to their surprise, they had several back months of Part D premium deducted at one time - which could use up all or almost all of a SS check and cause a budget crises.  Also some people found that it was difficult to stop a monthly premium payment through Social Security check withdraw.

The good news is that in the end, Medicare Part D plans are generally very good at correcting errors in under- or overpayment. Some people have even been surprised when they received an unexpected refund because too much money was being deducted from the SS checks - and they had not even noticed.
 
Bank Drafts
As noted, you can have your monthly Part D premium automatically taken directly out of your bank account by "draft".   This form of payment is really popular in Europe where many common transactions (like utility bills) are completed directly through bank transfer.  To keep a tidy budget, we have heard from some folks who like to receive their SS check, deposit it in the bank, and then let their Part D plan withdraw the monthly premium from their account so they can better keep spending record.
 
Coupon Books and Personal Checks
Another way to pay Part D premiums that is gaining popularity is to pay  with a personal check via coupon book -  just like if you were making a car payment (you send in the monthly payment check with your monthly coupon).   Some Medicare beneficiaries like this method because they simply write a check when they are paying bills each month - or other people may make all 12 payments at once so they know that Part D premiums are taken care of for the entire year.  Over-payments are returned In the event that these people do not keep their Part D plan for the entire year - for instance, if they move out of their Part D's service area and into another CMS region or state.

Credit Card Payment
Paying a Part D premium automatically by credit cards is also becoming more common.  Most credit cards are very secure and provide a detailed statement of monthly spending - again, good for many people who like to watch their monthly budgets.  The beneficiary also retains some control over the premium payment.  If they move to another Part D plan, they can ensure cancellation of  the previous Part D plan payment.  The downside is that interest rates are high on many credit cards and card holders usually must pay an annual fee for their card.  As a note, if credit cards are used, we suggest the balance should be paid monthly and the terms of the credit card should be closely examined.