Medicare For Beginners – Myself Included!

Medicare is not free! I can’t stress this enough. Medicare is not free!

Medicare Part B and D Premiums

You have premiums for Part B and Part D. Yes, you could have a Medicare Advantage premium, or a Medicare Supplemental premium but those services are voluntary.

If you are on Medicare and you will have a premium to pay.

Now, here is where it gets interesting. What are those premiums? Well, for most Americans they pay $134 a month in Part B and $34 a month in Part D, per beneficiary.

Modified Adjusted Gross Income Affects Medicare Premiums

But once they breach a certain threshold with their MODIFIED Adjusted Gross Income (MAGI), those premiums can change, and drastically too.

Single taxpayers with MAGI of less than $85,000 pay the premiums stated above.

Single taxpayers with MAGI of over $107,000 pay double. $22,000 difference in MAGI and premiums increase by 100%.

How is MAGI Calculated?

What is included in MAGI? It’s ALL your income, to include tax exempt interest.

What is NOT included in MAGI??? Roth IRA distributions.

Thus, a Roth is the easy way to prevent huge increases in Medicare premiums.

Roth IRA Distributions NOT Included in MAGI!

Weird how no one talks about this, isn’t it? Almost like the less you know about the tax code, the less proactive planning you will do and thus the more revenue that goes from YOUR accounts to the IRS.


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Medicare is NOT my area of expertise. Not in any stretch of the imagination. But after talking with Jae Oh from, I realized I really needed to up my game in understanding this most important issue.

Medicare for Beginners

After all, EVERYONE will use Medicare. And, unfortunately, if they don’t sign up correctly, their upside risk could easily bankrupt them.

So, in this video I look at a Blue Cross Blue Shield document which goes over some real basic Medicare information.

Medicare Definitions

Part A is the building you use for care, essentially.
Part B – The services you receive in that building, to include skilled nursing care.
Part C – is Medicare Advantage plans which MUST provide you an out of pocket maximum
Part D – prescription drug coverage
Medicare Supplements – Medigap coverage

Blue Cross Blue Shield

Blue Cross Blue Shield provides a nice example too that we go through to show you the risk and how a plan may minimize that risk to you.

If you are like me and completely ignorant about how Medicare works, this video is a good starting point.

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