Medicare Tax
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The Medicare Tax and Why You Pay It
- Who pays the Medicare tax?
- What are the Medicare tax rates?
- What is the Additional Medicare Tax?
The Medicare tax is a payroll tax that applies to all earned income and supports your health coverage when you become eligible for Medicare. The tax is automatically deducted from your paycheck each month and is a tax on your earnings, including wages, tips, certain Railroad Retirement Tax Act (RRTA) benefits, and self-employment earnings that fall above a certain level. There is no minimum income limit, and all individuals who work in the United States must pay the Medicare tax on their earnings.
Who pays the Medicare tax?
What are the Medicare tax rates?
What is the Additional Medicare Tax?
Who pays the Additional Medicare Tax?
What are the wage base limits for the Additional Medicare Tax?
Example of how the Additional Medicare Tax works
Income tax basics
Medicare tax frequently asked questions
What is the Medicare tax?
Are Medicare premiums tax-deductible?
What is the Medicare employee tax?
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Medicare Parts
Medicare Part A
Part A of Medicare covers hospitalisation. Inpatient treatment, limited time in a licenced nursing facility, limited home health care services, and hospital care are all covered under Part A.
Medicare Part B
Non-hospital medical costs such as doctor's appointments, blood tests, x-rays, diabetes testing and supplies, and outpatient hospital treatment are covered by Part B benefits. For this component of the original health insurance, you pay a monthly fee.
Medicare Part C
In a health insurance plan, Medicare Advantage or Medicare Part C normally covers all forms of health insurance coverage. Private insurance businesses that have been contracted by the CMS to provide a medicare plan as an alternative to the original health insurance plan provide it.
Medicare Part D
Medicare Part D is a prescription medication coverage option. Part D health insurance is available as a stand-alone plan from private insurance firms, with monthly rates varying from one to the next. Depending on the plan you're registered in, you'll split the cost of your prescription medicines.
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Why should I consider Medicare Advantage?
You get the same coverage as Original Medicare plus additional benefits from the Medicare Advantage insurance provider when you enroll in a Medicare Advantage plan.
What additional benefits and savings may be available?
There are many of savings to be had, but here are a handful you might not be taking advantage of right now:
- Your Social Security benefit will be reduced by $144 each month.
$2,500 to spend on dental procedures such as crowns, implants, and dentures. - $1,000 to spend on vitamins and aspirin at your neighbourhood drugstore
- Hearing aids and batteries cost $2,000
- $300 will be used on eyeglasses and tests.
Can’t I just find all this information through government websites?
It’s not simple to learn the ins and outs of Medicare. While Medicare.gov has a wealth of information, there is no real how-to when it comes to determining what is best for you and your lifestyle.
This is where we can help! We put our 20+ years of industry experience to work for you, giving you the peace of mind that you’re getting what you’re entitled to without the hassle.
When can I enroll in a new Medicare plan?
- Initial Enrollment Period – Most persons can enrol in Medicare Part A, Part B, Part C, and/or Part D for the first time within a seven-month period: three months before, three months during, and three months after they reach 65.
- Special Enrollment Period (SEP) – Certain life circumstances, including as moving or losing current coverage, may qualify you for coverage. You usually have two months to enrol, depending on your circumstances.
- Medicare Part C & D Annual Enrollment Period (AEP) – Every year, from October 15 to December 7, Existing Medicare beneficiaries can take advantage of this time to review and adjust their Medicare Advantage (Part C) and Medicare prescription medication plans (Part D). You cannot utilise AEP to enrol for the first time in Part A and/or Part B. The following year’s coverage begins on January 1st.
- Medicare General Enrollment Period – Every year, from January 1 to March 31, While the majority of individuals will receive Part B coverage when they join in Medicare, this period is allocated for those who did not enrol in Part B when they initially became eligible. Coverage begins on July 1st of the following year.
- Medicare Advantage Open Enrollment Period (OEP) – Every year, from January 1 to March 31, You can change to a different Medicare Advantage plan with or without medication coverage during this period, or move to Original Medicare and join a separate Medicare Prescription Drug plan. You cannot, however, go from Original Medicare to a Medicare Advantage plan, join a prescription drug plan while on Original Medicare, or change from one prescription drug plan to another prescription drug plan while on Original Medicare.
