The cost of Medicare
The price of Medicare's coverage can be a surprise to those that are new to the program.
You may have heard about Medicare in the news or from friends and family, but rarely have we taken a moment to ask "what is it going to cost me?".
Medicare is far from "free".
The videos and links on this page will give you a much better idea what "Original Medicare" will cost you. Make sure to tune into other sections to learn what the additional Medicare products will cost IN ADDITION to Medicare's Parts A and B.
Cost of Medicare Part A
Medicare’s Part A has been pre-funded by you during your working years. After you have worked for 40 quarters, you have earned your Part A with no further premium dollars required from you.
If you have not worked for 40 quarters, are married and your spouse has 40 quarters, you will qualify through your spouse.
If neither of these scenarios apply to you, part A will come at a cost (in the form of a monthly premium).
Click on the button below to see what part A would cost in this situation. Thankfully, it is fairly rare that a person will pay Part A premiums.
Cost of Medicare Part B
Although Part A of Medicare usually comes at no cost, there is a monthly premium associated with Part B of Medicare.
The base rate for 2020 is $144.60 per person, per month.
The video will highlight the cost of Medicare Part B.
Part B premiums are based on income. Review the video to learn how your income tax returns are connected to Medicare premiums.
Higher income earners will pay IRMAA (income related monthly adjustment amount) surcharges.
Medicare's IRMAA Surcharges
This may surprise you when you arrive in Medicare-land, but the cost of Parts B and D are based on INCOME.
The Social Security Administration will look back to your tax return from two years prior and use the Modified Adjusted Gross Income amount to adjust your Medicare Part B and Part D premiums accordingly.
They will assess what is called IRMAA – an Income Related Monthly Adjustment Amount.
Top earners in our country will pay $491.60 per person, per month for Part B and an additional $76.40 per person, per month for Part D.
Discuss with our advisors how you may be able to appeal this determination under certain circumstances.
It is important to know if you will receive a surcharge on your Part B or Part D premiums as it may be possible to appeal and lower your premiums.
How Do I Actually Pay For Medicare?
If you are currently receiving Social Security benefits (direct deposit), your Medicare Part B premium will be withheld each month from that amount.
If you are not receiving benefits when you apply for Medicare, you will receive a quarterly bill in the mail for the Part B premium. You may then pay via ACH, credit cards or a check.
At the point that you start drawing your Social Security benefits, the Part B premium will then be automatically deducted from your monthly deposit.