The monthly cost of Medicare differs for individuals depending on when they sign up, their yearly income and the number of years they pay Medicare taxes, reports WebMD. Monthly costs also vary depending on whether individuals select traditional Medicare or a Medicare Advantage plan that a private insurance company provides. Other factors include whether individuals opt to add Medicare Part D prescription drug coverage or Medigap supplementary health insurance.Continue Reading
Most people receive Medicare Part A hospital insurance for free, but if individuals have not paid Medicare taxes for at least 10 years, they must pay a premium for Part A coverage, explains WebMD. Although most people pay the minimum monthly premium for optional Medicare Part B medical insurance as of 2015, if their annual incomes are higher than $85,000, they must pay higher monthly premiums. If individuals do not sign up for Medicare Part B when they first become eligible at age 65, they must pay a permanent 10 percent penalty for every 12-month period that they delay signing up, points out the Social Security Administration.
Medicare Advantage plans typically cost more than traditional Medicare, as individuals must pay the Medicare Part B premium plus an additional premium for the Advantage plan, according to WebMD. Monthly premiums vary widely from plan to plan. Monthly premiums for Medicare Part D prescription drug coverage differ depending on the private insurance companies that offer the plans, and those with higher incomes sometimes pay more. Premiums for Medigap policies that supplement traditional Medicare vary by company.Learn more about Health Insurance