Medicare is a government-sponsored health insurance program. Health insurance for inpatient care is free to workers and spouses who have sufficient work history and age to qualify. The benefits of a long life are Medicare coverage at age 65 and Social Security retirement benefits at age 66. Medicare Part A is hospitalization insurance, free with sufficient work history. The insurance is free, but hospitalization is not. You pay a deductible and about 20 percent of all charges if you do not have Medicare Advantage or a Medicare supplement insurance. Medicare requires monthly payments or premiums for Parts B, C or D.
Part A Hospitalization
Hospitalization is the most expensive part of medical care in the U.S., and that is the part that Federal Insurance Contributions Act taxes cover. Workers pay FICA taxes for Social Security and Medicare on earned income for as long as they work, compiling years of payments to qualify for hospitalization coverage. Medicare requires no additional payment for Part A coverage once a person qualifies for the insurance.
Part B Premiums
Part B Medicare covers outpatient care and doctor visits, along with diagnostic tests. A monthly payment or premium, as the insurance industry calls it, is required to maintain Part B Medicare insurance. The basic cost in 2011 is $115.40 for new enrollees with income under $85,000 for singles or $170,000 for couples filing a joint income tax return. Individuals with income in excess of these amounts pay an additional premium for coverage.
Parts C and D
Part C is Medicare Advantage and works like a preferred provider organization or health maintenance organization to give the enrollee a better value. Depending on the plan you choose, Part C can reduce the cost of Part B. Part D is prescription drug coverage, and this segment of Medicare works much like Part B. Higher-income recipients pay an additional premium for the insurance coverage. The higher premium amount for Part D is automatically withheld from your Social Security check.
If you receive Social Security and enroll in Part B for medical care coverage of Medicare, Social Security takes the premiums or monthly payments out of your Social Security check before you receive it. If your Social Security is not enough to pay these monthly insurance premiums, you receive a bill each month for the additional payment. If you choose not to have Part B or D coverage, you must provide written notice to Medicare. The Centers for Medicare and Medicaid Services notifies Social Security to remove the coverage from your deductions on your Social Security check.
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