How Are Medicare Premiums Determined?

Who Qualifies for Medicare?

Any citizen or continuous resident of the United States for the past five years aged 65 or older qualifies to receive Medicare benefits. Some people who are ineligible for Social Security may qualify for Medicare.

Part A

There are no Medicare premiums for Part A coverage unless neither the insured nor his or her spouse has worked 40 or more quarters of Medicare-covered employment. Part A covers the majority of the cost associated with hospital visits once the annual deductible ($1,100 for a hospital stay under 60 days) has been met. Depending on the services rendered, Medicare’s portion may vary, but it is the larger portion compared to the part paid by the patient.

Part B

This is Medicare’s version of health insurance, covering health expenses incurred outside the hospital. The monthly premium for 2010 is $96.40 for most recipients. This applies to people who have the Social Security Administration withhold their Part B Medicare premiums and who earn $85,000 or less per year (or $170,000 for married couples filing jointly). All other Medicare beneficiaries will pay a premium of $110.50 per month.

Part C

This is Medicare’s Advantage Plan which is offered through private insurers. Parts A and B are included in the Medicare premiums for Part C, and sometimes Part D (prescription drug coverage) is included as well. Details about coverage, premiums, and co-pays must be obtained from insurers, as these differ significantly from company to company.

Part D

As with Part C, the Medicare premiums for Part D coverage differ from one insurance company to the other. Part D plans have a yearly deductible and a co-pay in addition to the monthly premium. All Part D plans do not cover the same drugs, so it is important to check that the necessary drugs are covered before choosing a plan. Often the premiums are higher for more drug coverage.

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