WHAT ARE 'Medicare Part B Premiums'

Medicare Part B premiums are a monthly fee that Medicare participants pay for medical insurance to cover services not covered in Medicare Part A. By contrast, Medicare Part A, or hospital insurance, does not require most people to pay a premium.

BREAKING DOWN 'Medicare Part B Premiums'

Medicare Part B premiums are based on the beneficiary's income. Medicare is a U.S. federal health program that is divided into two main parts, A and B. Part A covers a large portion of hospital-related costs for eligible people over the age of 65 and only includes medically necessary and skilled care, not custodial care. Persons not eligible for coverage can participate in the program if they pay a monthly fee. Part B is optional and pays a portion of non-hospital provided medical care, such as doctor visits and other outpatient services. There is a monthly fee for this program. The fee was $93.50 in 2007 and is likely to rise in the future. Part B coverage is subject to various deductibles and co-pays. Medicare helps individuals when they may have serious health problems but lack funding for treatment.

Medicare Part C and D

The Medicare program was expanded in 1997 and refined in 1999 to include Part C Medicare + Choice, now known as Medicare Advantage. Part C gives Medicare beneficiaries the opportunity to enroll in private healthcare plans and receive all Medicare services, including Part A and Part B, from a private provider. It operates like the healthcare coverage provided by most employers. A menu of offerings is available with a variety of coverage options, co-payments and monthly costs. The private provider also covers services not provided by Parts A and B. Part C is available in most areas and provides a convenient way to receive medical services.

In 2006, Medicare expanded again to offer Part D, prescription drug coverage. Part D is an optional insurance program that charges a monthly fee in exchange for prescription drug coverage. The monthly cost varies widely depending on the coverage options. Like employer-provided health care plans, Part D holds an open enrollment session each year, during which time program participants can choose to change their coverage options. While Part D is a voluntary program, Medicare recipients must review their healthcare needs immediately upon eligibility because the cost of Part D increases each year for individuals who choose not to participate immediately upon eligibility.

Medicare qualification and coverage

Medicare subsidizes individuals who are: aged 65 or older a U.S. citizen or permanent legal resident for five years; disabled and has collected Social Security for a minimum of two years; undergoing dialysis for kidney failure or in need of a kidney transplant; or who have Amyotrophic Lateral Sclerosis, Lou Gehrig's disease.

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