Social Security Report

Is Medicare Free? Not Really - The Street

Contrary to a popular belief, Medicare is not free. Well, not totally free anyway, especially for those with a higher income. Many think that because they pay a Medicare tax via FICA withheld from their paycheck, that all Medicare services are free. That 1.45% FICA tax you pay for Medicare, if you pay it long enough, does indeed entitle you to Medicare hospitalization services at no cost; generally, anyone eligible for Social Security is also eligible for free Medicare Part A (hospitalization coverage). But that is not the case for Medicare’s outpatient coverage (known as Medicare Part B), or prescription drug coverage (known as Part D). For those services you will pay a monthly premium and, if your “provisional” income is high enough, you’ll also pay a supplement on top of the standard Part B and part D premium for those coverages. In this article by certified financial planner Robert Powell appearing at The Street website, Mr. Powell discusses Medicare costs with Medicare expert Dana Anspach who explains how Medicare’s premium-structure works, including a special rule called “IRMAA.” Click here to read more.

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