Understanding Medicare premiums

Published: Tuesday, July 2, 2013 at 01:34 PM.

At the end of May, the Medicare Trustees reported that Medicare costs are expected to grow more slowly than was previously expected. One of the positive effects of this trend is that Medicare premiums are also expected to increase more slowly. What does that mean for you and your family? Here’s a look at the different types of Medicare premiums.

Q: What do people mean by “Medicare premiums”?

A: When people talk about Medicare premiums, they’re often thinking of the Part B premium (Part B primarily covers doctor visits and other outpatient services). For most beneficiaries, this premium is automatically deducted from their Social Security benefit each month. In 2013, most people with Medicare pay a Part B premium of $104.90 a month.

Q: What other Medicare premiums exist besides Part B?

A: Most people with Medicare do not pay a premium for Medicare Part A (which covers hospital and other inpatient care) because they or their spouse paid enough in Medicare taxes during their working years to qualify for premium-free Part A.

If you have a Part D prescription drug plan, you do pay premiums. In 2013, the national average for a Part D monthly premium is $40.18, but Part D premiums vary widely from plan to plan and region to region.

If you have a Medicare Advantage plan, your plan usually charges an additional premium.

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