AHIP Practice Exam

What is the proper method for Mr. Lopez to pay his Medicare prescription drug premiums?

1. Pay with cash in person

2. Make a lump sum payment annually by check

3. Use automatic withdrawal or direct monthly billing

4. Pay through an insurance broker

The correct answer is: Use automatic withdrawal or direct monthly billing

Using automatic withdrawal or direct monthly billing is the most efficient and convenient method for Mr. Lopez to pay his Medicare prescription drug premiums. This option allows him to set up a regular payment schedule, ensuring his premiums are paid on time each month without the need for manual intervention. This minimizes the risk of missed payments, which can lead to lapses in coverage or additional fees. Automatic payments can also be easily managed through the bank or Medicare's billing system, providing Mr. Lopez with a straightforward and hassle-free way to manage his healthcare expenses. Additionally, it helps in budgeting, as he can anticipate the amount that will be withdrawn regularly rather than dealing with varying amounts from lump sum payments or the administrative burden of paying physically in person. Other methods, like paying with cash in person, may be less safe and secure, while lump sum payments can create financial strain upfront and require greater management of funds. Paying through an insurance broker, while potentially beneficial for guidance, does not streamline the payment process itself, making automatic withdrawal the ideal choice for routine premium payments.