The law requires an adjustment to the monthly premiums for Medicare Part B (health insurance) and Medicare prescription drug coverage. Monthly premiums vary depending on the plan you sign up for. The amount may change each year. You may also have to pay an additional amount each month depending on your income. Medicare plan premiums vary from year to year.
However, the factors the government uses to calculate your monthly premium depend on what part you have. What is a premium, deductible, coinsurance, or copay? Am I eligible for premium-free Part A? Who pays a higher Part B premium because of their income? Who pays a higher Part D premium because of their income? It varies depending on the Medigap policy you purchase, where you live and other factors. For Medicare beneficiaries who receive Social Security retirement benefits, the Part B premium is deducted from their Social Security paycheck. While both are health insurance programs administered by the Centers for Medicare and Medicaid Services (CMS), Medicaid is for people with limited income and resources.
Most people don't pay any premiums for Medicare Part A, but even for those who do, there are no income-related surcharges, so Part A premiums aren't affected by income. Understanding Medicare premium calculations can help you better plan your healthcare finances, which is vital for older people with fixed incomes.
