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July 28, 2022
Warning: Medicare Isn’t Free

Warning: Medicare Isn’t Free

If you’re approaching Medicare age, you may be in for a big surprise: Medicare isn’t free.

In fact, your health coverage could cost you thousands of dollars per year, depending on your plan. Today we’re looking at why this is the case and how you can become more knowledgeable about your healthcare costs.  

Don’t I pay paycheck taxes that cover Medicare?

Technically, yes. A portion of your payroll taxes go to Medicare, but it isn’t just for your personal Medicare. That’s because the taxes help pay for the entire Medicare program.  

Think about it like your auto insurance policy: you pay every month, but those funds don’t just sit in an account waiting for the day a rock hits your windshield. Your policy determines how much to cover. The same thing applies to Medicare.

Your taxes are put into the system and then, once you’re eligible to use them, you get your Part A Medicare coverage.  

Why Medicare isn’t free

Medicare isn’t free because, simply put, it was never meant to be free. There’s more money going out of the Medicare accounts than there is coming in because people age in every day and healthcare costs keep rising.

Medicare deductibles, premiums, and copayments are designed to help you fund your Medicare coverage.  

Are Medicare Parts A and B free?

Medicare Parts A and B are what’s called Original Medicare and are the parts provided by government programs. However, even Original Medicare has deductibles and copayments.  

  • Medicare Part A’s deductible is $1,556 in 2022 and applies to each benefit period, or every 60 days from the first day of admittance to the hospital or other qualifying inpatient care center.  
  • Medicare Part B, which treats outpatient medical concerns, also has a deductible. In 2022, that annual deductible is $233. The copayment amount can vary by type of service, but averages around 20%.

Medicare monthly costs

In addition to deductibles and copays, Medicare also has monthly premiums. Part B coverage has a monthly premium of $170.10.

Although most people don’t end up having to pay Part A premiums because they’re waived for those who have paid taxes for 40+ quarters (or 10 years of working in a job with Medicare taxes), those who do not qualify could owe up to $499 a month.  

Does anyone get free Medicare?

Technically, yes. It is possible to get “free” Medicare if you also qualify for Medicaid. This is a special type of Medicare Advantage plan called a Dual Eligible Special Needs Plan, or D-SNP.

Individuals qualify through low income or a disability that makes them unable to pay for their healthcare costs. But the reason it is free is that Medicaid covers the costs, not that the fees are waived.

Related: 27 Free Preventive Screenings, Tests, and Shots From Medicare

How can I manage my Medicare fees?  

There are a few ways you can manage Medicare fees. One way is to explore your coverage possibilities. Many Medicare Supplement and Medicare Advantage plans offer low premiums and copays. A well-informed shopper reviews their options and finds a plan that works with a budget.  

We also have a tool to help you figure out your Medicare costs no matter what type of plan you choose. Check out our Medicare Cost Worksheet and we can help you calculate your costs. Just enter in the amounts asked for and the worksheet will automatically add it all together for you.

The Medicare Cost Worksheet will help you:

  • Find out how much Medicare will cost you
  • Discover the monthly premium for a Medicare Supplement plan
  • Fill in Part D drug plan quotes from three potential carriers
  • Create a clear Medicare budget

If you need help with this worksheet, just give us a call and we will get you quotes and answer any questions you may have.

Conclusion

Medicare isn’t free, but it shouldn’t cost an arm and a leg.

Explore your options, look at what works best for you, and let us help you save money on Medicare.

If you have any questions about Medicare costs or if you’re worried that you’re overpaying for your coverage, reach out and we can help clear up any concerns you might have.

Luke Hockaday
By
Luke Hockaday
Luke Hockaday is a Customer Success Rep here at Senior Allies. Luke has been helping Medicare-eligible clients with their insurance and retirement-planning needs since 2011. Luke is passionate about 3 things, and 3 things only: senior insurance, football, and food!

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