How Are Medicare Rates Calculated?


Quick Answer

Medicare Part A is premium-free for those having enough work hours to qualify for Social Security benefits, while Medicare Part B rates are calculated on income. Medicare Part C plan rates vary depending on providers, and Medicare Part D drug plan rates vary depending on the plans and drug formularies.

Continue Reading
Related Videos

Full Answer

Workers and their spouses who qualify for Social Security or Railroad Retirement Board retirement benefits receive Medicare Part A hospital coverage for free, while those without enough work hours pay up to $407 per month as of 2015. Medicare Part B medical coverage premiums start at $104.90 per month, but if an enrollee's income is above $85,000 per year, the annual Part B premium goes up in increments to a maximum of $335.70. Those who do not enroll in Medicare Part B at age 65 pay a permanent late enrollment penalty that goes up every year they delay enrollment.

Medicare Part C plans, also known as Medicare Advantage, are offered by private companies that supply all the services of Medicare Parts A and B and sometimes extra medical needs such as vision, dental, hearing, drugs, and health and well-being. Enrollees usually pay the standard Medicare Part B premium and an extra Medicare Advantage premium that varies from company to company. Private companies also supply Medicare Part D prescription drug coverage, and plan rates vary depending on the pharmacies in the plan's network and the brand name and generic drugs in the plan's formulary.

Learn more about Health Insurance

Related Questions