Is Medicare Free? – Forbes
Last week in our company’s monthly New-to-Medicare webinar, an attendee asked a common question: “Isn’t Medicare supposed to be free when we turn 65? They’ve been taking taxes out of my payroll checks all these years, so what gives?”
This man is not alone. Every month my agency receives scores of similar questions. How much does Medicare cost? Do I need to pay for Part B if I get a supplement? Does Medicare get more expensive over time? Why does it cost so much?
For people who didn’t know that their payroll taxes don’t completely pay for Medicare, this news can be devastating. I’ve even seen it delay retirement for some individuals by years. They needed more time to prepare their nest egg after learning that Medicare Parts B and D have monthly premiums.
Here are the costs you should begin preparing for now if Medicare is on the horizon.
Cost Of Medicare Part A Hospital Insurance
Remember those payroll taxes? They get set aside in a trust fund to finance your future Part A hospital benefits. If you or your spouse have worked at least 40 quarters in the U.S. and paid those taxes, then you can look forward to paying nothing for Part A once you are on Medicare.
If you don’t have 40 quarters, you can still get Part A on a buy-in basis, but it’s pricey. In 2017, you can purchase Part A for $413 per month or, if you have worked 30 – 39 quarters, then you can buy in for a reduced rate.