SS_Medicare_flipbook_2017 - page 20

Costs Associated with Medicare
Medicare generally covers only about 60% of the cost of health-care
services for beneficiaries age 65 and older. Out-of-pocket costs may
include premiums, deductibles, copays, and coinsurance. Costs vary
depending on the coverage you choose and the medical services you use.
Medicare Premiums
Part A
is generally premium-free if you or your spouse paid Medicare payroll taxes for at
least 10 years. If not, you may pay up to a $413 monthly premium in 2017.
Part B
premiums are based on modified adjusted gross income (AGI), as reported on
your IRS tax return two years before the year for which Medicare premiums are paid.
(See facing table.)
Part C
(Medicare Advantage) premiums vary by plan.
Part D
premiums also vary by plan, but higher-income individuals must pay an extra
charge in addition to the plan’s regular premium.
If you are enrolled in Original Medicare Parts A and B, you have the option of purchasing
Medicare Supplement Insurance, or Medigap, which is sold by Medicare-approved private
insurers. Medigap policies are designed to help cover the deductibles and copayments that
the original program doesn’t cover, but it will not pay for procedures that aren’t covered by
Medicare. If you are enrolled in a Medicare Advantage plan, you don’t need (and cannot
enroll in) Medigap.
People often underestimate the potential cost of
health care in retirement — even with Medicare.
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