1. How much will Medicare cost me?
Workers who pay FICA taxes for forty quarters (10 years) receive hospital coverage at no additional charge. Check out our article on how Medicare works (part A) to learn more.
(FICA taxes are payroll taxes for Medicare and Social Security – roughly 15.3% of wages. Note also that the guidelines described in this article are current as of February 2013 – the Federal government may change the rules or increase the tax amounts in future years.)
In addition to the FICA taxes, the Federal government charges extra for out-of-hospital coverage and prescription medicine coverage (Rx). Reference Part B and D on our article on how Medicare works to learn more. The amount you pay for Parts B and D depends on the amount you earned two years before you enroll in Part B. In 2013, the minimum premium for Part B is $104.90/month – this is based on the income you earned in 2011. People who continue to work and earn more than the minimum allowed amount must pay more for Parts B and D – up to $335.70/month for Part B and $66.60/month extra for Part D in 2013.
So, your first assignment is to: Use the worksheet provided above to calculate the amount you will pay for Medicare Parts B & D. You pay this money to the federal government – usually the government deducts it from your Social Security check. If you continue to work and postpone receiving Social Security (i.e., retirement), you’ll need to pay the government directly for Medicare Part B and Medicare prescription medicine coverage (Rx).
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Read the next article: Am I required to enroll in Medicare Part B?