Those who work in the United States pay Medicare payroll taxes. Medicare taxes are withdrawn from your paycheck, and many seniors assume this money will fund their Medicare premiums in the future. However, this is not 100% true. So, who pays for medicare insurance richmond va? Keep reading to find out!

Medicare taxes

You may find it as a surprise that the money you have paid into Medicare over the years did not go to a Medicare account specifically for you. So, where did the money go that you have paid out over the years? The Medicare taxes you paid funded the seniors who were on Medicare at that time. For example, those currently paying Medicare taxes fund Medicare for today’s senior citizens.

If you aren’t covered by creditable coverage, you will apply for Medicare during your Initial Enrollment Period, which is based around your 65th birthday month. Your monthly premiums will draft from your Social Security check if you receive Social Security benefits. Those not receiving Social Security benefits will receive a quarterly bill for their premiums. If you aren’t sure when you’re Medicare will be approved, visit this link here: boomerbenefits.com/when-will-my-medicare-get-approved/

So, how much will Medicare cost you monthly?

How much is Medicare Part A?

Many of you won’t have to pay a dime for Medicare Part A. The reason behind the $0 premium is that some of the money you paid in Medicare taxes did, in fact, fund your Part A premium. If you or your spouse have worked 40 quarters (ten years) in the U.S. and paid payroll taxes, you will have a $0 monthly Part A premium.

Many of you might not have worked 40 quarters but worked between 30-39 quarters. If this is your case, you will pay $274 monthly for Part A in 2022. If you have less than 30 quarters, you will pay the total Part A premium of $499 per month in 2022.

Now, Medicare Part A does have a deductible. In 2022, the Part A deductible is $1,556 per 60-day benefit period. So, if you become an inpatient at the hospital, you are responsible for the Part A deductible and any co-insurance costs if you don’t have secondary coverage.

What is the cost of Medicare Part B?

Everyone will pay for Medicare Part B, no matter their work history. The standard Part B premium is $170.10 per month in 2022. However, Medicare Part B premiums are calculated differently than Medicare Part A. The Social Security office will look at your tax returns from two years ago to determine your Part B premium.

Those in a high-income tax bracket will be subject to an income-related monthly adjustment amount, known as IRMAA. You will pay the IRMAA charge as long as you remain in a high tax bracket. If your income were to change, you could file an IRMAA appeal.

On top of the Part B premium, you will also pay the Part B deductible when you seek outpatient care. In 2022, the annual Part B deductible is $233. Once you pay this amount, Part B will begin to cover 80% of your Medicare-approved charges. Therefore, you are responsible for the 20% co-insurance.

Medicare beneficiaries often purchase an additional plan, such as a Medigap or Medicare Advantage plan, for cost-sharing help. You can find a Medicare blog that details what these types of plans cover.

Are additional Medicare plans free?

Private insurance companies sell Medigap and Medicare Advantage plans. These two plans are very different and have different monthly costs.

A Medigap rate depends on your age, gender, zip code, tobacco use, carrier, and more. You will want to speak with a reputable Medicare broker to receive an accurate quote from multiple insurance carriers! Whatever the premium may be, you are responsible for the monthly payment. If you fail to pay for your Medigap plan, the carrier will disenroll you from the plan.

Medicare Advantage plans are different when it comes to their quoting. Advantage plans vary from zip code to zip code, and the insurance carrier will set the plan’s cost-sharing amounts, such as your premium, deductible, and copays. Again, working with a Medicare broker can help you shop Advantage plans across your area and find the most cost-effective plan for you.

Final point

The only person who is responsible for paying your Medicare premiums is yourself! But, if you are low-income, you may qualify for Medicaid assistance. To learn more about the cost of Medicare, visit Medicare.gov.