Medicare is a social health insurance program designed to spread the cost of healthcare in order to protect everyone.
To answer the question “how much does Medicare cost“, you have to factor in the different aspects which include hospital insurance (part A), medical insurance (part B), Medicare advantage (part C), and Medicare prescription drug coverage (part D).
Individual Medicare coverage plans cater for different types of medical services. For example, to know which costs apply, you need to decide whether you want costs such as getting a mammogram covered.
Medicare Hospital Insurance
The Part A Medicare plan covers hospital insurance and not everyone has to pay it. In 2013, the cost of Part A was $441 every month and this figure will go down to $426 in 2014.
If you do not buy Medicare immediately you are eligible, your monthly payments may increase by 10%. You will have to pay this higher figure each month for double the time you would have had Part A but delayed signing up.
If you or your spouse paid all Medicare taxes before retirement, then you will not have to pay Part A and this is referred to as Premium-Free Part A.
Medicare Medical Insurance
The Part B (medical insurance) monthly payment for most people is $104.90 per month. However, depending on your gross income you may have to pay a higher amount.
For instance, people who filed an individual tax return 2 years ago and reported a gross income of between $85,000 and $107,000 and those who filed jointly reporting a gross income of $170,000 to $214,000 pay $146.90 each month.
Those who earn a gross income of $107,000-$160,000 (individual) or $214,000-$320,000 joint pay $209.80 per month. Those who reported a gross income of $160,000-$214,000 (individual) or $320,000-$428,000 (joint) pay $272.70 monthly.
Finally, those who reported a gross income higher than $214,000 (individual) or $428,000 (joint) pay a monthly premium of $335. The late penalty fee of Part B is 10% and lasts for as long as you will have Medicare.
Medicare Advantage (MA)
The cost Medicare Advantage (Medicare Part C) depends on each individual plan. The Part C acts as a replacement of the original Medicare and has the benefits of both Part A and part B.
If you buy this plan, you may be eligible for coverage on in-patient hospital services, payments to surgeons and physicians, and payments for outpatient services such as mammograms, x-ray, lab tests, and diagnostic tests.
Medicare Prescription Drug Coverage
The Medicare prescription drug coverage (Part D) is available to anyone who has Medicare. It helps patients pay for prescribed drugs.
However, it does not cover all prescription drug costs and the patient has to pay part of the cost. The cost of Part D depends on the drug plan and the gross income of the individual. The higher one earns, the more he/she is eligible to pay per month.
Similar to the other parts, you need to buy the Part D coverage immediately you are eligible otherwise you will end up paying late enrollment penalties.
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