Cost of Medicare Premiums
2014 Medicare and Medigap Updates
Cost of Medicare Premiums
With medical costs at an all-time high, knowing the cost of Medicare premiums is a very important step for those evaluating the decision whether or not to sign up for Medicare. However, with so many details that need to be considered, there should be a concerted effort to tabulate all of the projected premium payments. Only by doing this can one can have a clear picture of the savings and benefits that are available via Medicare.
Here are some of the specific premium payments that can be expected depending on the conditions and limitations as it applies to a client.
If one has paid the required Medicare taxes during his or her working years, Medicare Part A is automatically available with no need for premium payments. This also applies to the spouse of the one who made the Medicare tax payments. The eligibility takes effect the moment the worker or his spouse reaches the age of 65.
For those who are signing up to Part A Medicare without the benefit of prior tax payments, the cost of Medicare premiums for Part A is about $451 for 2012. If an individual has worked for 30 to 39 quarters and paid the corresponding Medicare tax during this period, the Part A premium is $248.
For those who want to sign up to Part B coverage, the monthly cost of Medicare premium is $99.90 in 2012. However, this amount can be higher depending on the annual household income for the policy holder. Single individuals who earn more than $85,000 per year or couples who have a combined annual earnings of more than $170, 000 may be asked to pay more than the pre-defined $99.90 monthly premium for Part B membership. At most, the policy agreement states that individuals who earn more than $214,000 per year or couples with a combined earning declaration of more than $428,000 annually will be required to pay $319.70 for Part B cost of Medicare premiums.
For Part D, the premium cost is considered as an add-on to the original premium cost which is calculated based on the above figures and varies only if you signed up to just Part A Medicare or if you have both Part A and Part B coverage. The cost of Medicare premiums for Part D is baked into Part A or B coverage if one earns below $85,000 per year and has a ladder structure for those who earn above this figure. Individuals who earn above $214,000 per year or couples with a combined earning higher than $428,000 will be charged $66.40 extra for Medicare Part D coverage.
From these monthly payments, a comprehensive analysis of the projected benefits can be made when the deductible amounts are known.
For Part A, the cost of Medicare premiums entitles the policy holder to a deductible of $1,156 per benefit period as well as a coinsurance of $289 per day for day 61 to 90 of hospitalization, and $578 thereafter until day 150. Beyond this, Medicare pays for all the expenses as defined in the Part A coverage terms.
In the case of services from a skilled nursing facility, the coinsurance amount is maxed at $144 per day for day 21 to 100 of the benefit period.
For Part B, the Medicare deductible is capped at $140 per year.
Knowing this cost of Medicare premiums is an important step in assessing the value of signing-up to Medicare. It also shows that government subsidies are substantial in order to help seniors and retirees pay for their medical needs above 65 years old. Considering that medical needs grow as a function of one’s age, there is no doubt that there are benefits to be had by signing up to Medicare coverage and a cost-savvy individual would be wise to take advantage of this offer to offset today’s rising cost of medical services.