Health Care Reform:

What Does Medicare Cost?

Finding the bottom line cost for Medicare isn't simple. The amount you'll spend can vary depending on the type of coverage you have, your income and assets, and many other factors.  But to give you a rough idea, here's an outline of Medicare's costs -- both the obvious and hidden costs.

 Medicare Part A:

For most people Medicare Part A is free. That's because they -- or their spouses -- were paying Medicare taxes while they worked. 

You might have to pay for Medicare Part A if you were self-employed or didn't work during much when you were younger. If you or your spouse paid Medicare taxes for less than 10 years total, you will have to pay a monthly fee for Part A coverage. In 2012, the highest premium of this kind will be $451 per month, or $1 more than in 2011.

 Medicare Part B:

Part B isn't free. You have to pay a monthly Medicare premium, which is usually taken right out of your Social Security check. For 2012, this fee is $99.90 per month for most people.

If you have higher than average personal income (over $85,000) or household income (over $170,000), you must pay a higher monthly Medicare premium. The exact monthly fee will vary depending on your income, ranging from $139.90 to a maximum of $319.70. In addition, there is a higher income adjustment fee that will be tacked on to the monthly costs, and that ranges from $11.60 to $66.40.

Then, you have to pay a yearly Part B deductible, which in 2012 is $140. After you pay $140 yourself, your benefits kick in.

Part B is optional. If you don't want it -- because you have other coverage through an employer, for instance -- you don't have to pay for it. But you have to ask to opt out. Otherwise, the Medicare premium is subtracted from your Social Security check automatically.

There's a penalty for signing up late. If you don't sign up for Part B when you first become eligible, your monthly Medicare premium may be higher than $99.90.

 Medicare Advantage (Part C):

Medicare Advantage are health plans sold by insurance companies but overseen by Medicare. They are alternatives to Original Medicare, and usually offer more services than Original Medicare at a higher price.

To qualify for Medicare Advantage, you need to have Medicare Parts A and B. So that means that you'll at least need to pay the Part B monthly premium. 

On top of that fee, you may need to pay a monthly premium for the Medicare Advantage plan itself. The prices vary a great deal depending on the plan you've chosen. Some may have further charges, like deductibles and premiums for additional coverage for things like prescription drugs.