Medicare is a medical insurance program that is offered by the government of the United States to its citizens, normally when they have reached the retirement age or an age at which they are no longer able to work. Some other countries offer health care programs that are similar to Medicare, but because these programs are administered by individual government agencies, they differ greatly. There are a number of factors that go into determining the Medicare rates US citizens pay. Factors such as income, health care needs, and state of residence help to determine the rates of Medicare premiums.
Medicare A deals solely with hospital coverage and is free for all retired US citizens. Medicare plans B, C, and D offer a variety of different benefits and include premium rates that do vary. They are elective coverages, meaning that if a citizen gets comparable coverage from a private insurer or prefers to pay out of pocket for a particular type of expense, she or he need not receive Medicare benefits. For those in lower income brackets who need coverage and may have trouble paying Medicare premiums, there are government assistance programs available.
One common determinant of Medicare rates is the income bracket of the individual receiving the benefits. For example, an individual who is in a higher income bracket because he or she has earned more money throughout life is expected to pay higher premiums. Likewise, an individual in a lower bracket will pay less for Medicare coverage.
Medicare rates may also be determined by the cost of living. In other words, rates may drop or rise depending on the costs of medical treatment, housing, food, and other necessities. It is common for rates to change year after year as the cost of living also changes.
Factors such as the age of the individual, his or her health status, and even the location of the individual's residence help to determine Medicare rates. An individual who is 75 may find that his or her rates have changed significantly since the age of 65. The state that an individual lives in has a part in determining which rates he or she pays. Health and lifestyle can also play a part in determining rates, and a tobacco user is more likely to pay higher rates than someone who has never smoked.
In some cases, a Medicare supplement is necessary. This is coverage offered by private insurance companies to cover a gap left by the government-funded coverage. The gap normally is normally related to issues such as high deductible or coinsurance rates. The rates offered by the private insurance companies are often determined by the insurance underwriters. The services and coverage offered in each supplemental plan are the same from company to company and are regulated by the government.