BenefitsAll
Medicare Did You Knows
To help better understand Medicare, review our “Did You Know” lists. After reviewing our lists, you can decide on the importance of Medicare in your financial life and prepare accordingly.
List #1
- Medicare is a federal health insurance program for people age 65 and over, young people with disabilities, and those with end-stage renal disease
- Medicare is funded by a separate payroll tax called Hospital Insurance tax (or HI tax), AND premiums are deducted from Social Security checks
- The Medicare HI tax rate is 1.45%. Both you and your employer contribute 1.45% of your taxable earnings (for a combined contribution of 2.9%). Beginning in 2013, an additional Medicare tax of 0.9% is in effect for individuals with over $200,000 and $250,000 (for married couples filing jointly) in annual income. There is no salary cap for the Medicare HI tax--all of your earnings are taxed
- Medicare consists of four parts: Part A - hospital insurance; Part B - medical insurance; Part C - Medicare Advantage (MA) plans; Medicare Part D - prescription drug plans
- Medicare Part A coverage is free to everyone who meets its eligibility requirements. If you or your spouse did not work and pay Medicare taxes (for at least ten (10) years), you may purchase Medicare Part A coverage
- Medicare Part A (hospital insurance coverage) covers charges for facilities such as inpatient hospital care, skilled nursing, hospice care, home health care, and long term care facilities. It also covers services such as chemotherapy and anesthesia
- Medicare Part B (medical insurance coverage) covers medical services and supplies to prevent, diagnose, and treat an illness or injury. Outpatient care, doctor's services, and durable medical equipment are some items covered by Part B
- Medicare Part B is not free. Enrollees must pay a monthly premium ($164.90 in the year 2023) deducted from their Social Security benefits or billed to them if they do not receive Social Security benefits. The premium is subject to change (increase or decrease) and is announced annually. There are also deductible and copayment costs for specific services
- Medicare Part C (also called Medicare Advantage (MA) plans) are plans that cover all of the services provided by Medicare Parts A and B (except hospice care) but are provided by private insurers who meet Medicare standards. These plans may offer more coverage than Parts A & B, including prescription drug, vision, and dental coverage, etc.
- Medicare Part C is not a supplemental plan, it is an alternative to using Medicare Parts A & B
- There are many different types of Medicare Part C (Medicare Advantage) plans, including HMO, PPO, Fee-for-Service, Medical Savings Account, and Special Needs plans