How Is Medicare Part C Financed?

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   Ted Ratliff

   Owner, SFS Associates,

   Like original Medicare ultimately is financed through your taxes.  Medicare pays private insurance companies a set amount per enrollee to administer the claims.  The company can then take that money and develope their plan whithin guidelines set by Medicare.  If the company is able to provide the benefits with the money provided by Medicare, then you may not have to pay an additional premium other than your normal Medicare Part B premium.  If the benefits are more than Medicare allowance allows for then some plans charge an extra premium in addition to what Medicare provides.  This is where the danger comes in when you hear about Medicare cutting funds to Medicare Advantage.  Right now there are some very good zero premium plans available.  These may be forced to go away if cuts are allowed to continue.

   Answered on May 25, 2013

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