How are Medicare premiums determined?
Learn about Medicare monthly insurance premiums for 2009, and how Medicare premiums are determined for Medicare Part A and Part B.
Medicare, the government-funded medical care program for persons over 65 and persons who have been entitled to disability benefits for at least 24 consecutive months, is divided into two main parts, Part A and Part B. Medicare premiums for both parts vary and are determined based upon a number of factors.
So, how are Medicare premiums determined?
Medicare Part A acts as hospital insurance. For any person who has worked 40 or more quarters of Medicare-covered employment, there is no monthly premium for Medicare Part A coverage. There is, however, a deductible (for 2009, the amount is $1,068) that must be met. For those who have between 30 and 39 months of Medicare-covered employment, the monthly premium is $244 for 2009 in addition to the deductible. For those with fewer than 30 months of Medicare-covered employment, the cost for Part A coverage is $443 per month for 2009, also in addition to the deductible.
Medicare Part B acts as medical insurance. The monthly premium for individuals for 2009 is $96.40, provided that the individual’s yearly income is less than $85,000 if he or she is single, and less than $170,000 if he or she is married. For those with personal incomes exceeding $85,000 individually or $170,000 jointly, the monthly premiums increase incrementally according to income strata. It’s important to note that income is determined based upon tax returns from two years previous. For example, premiums for 2009 are based on an individual’s 2007 tax return. If a person’s income has declined in the intermittent two years, he or she can request that Medicare evaluate his or her income based on a more recent return.
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