Medicare Part A Isn't (Entirely) Free. Here's How Much It Costs
Whether you're a W-2 employee or self-employed, you pay into Social Security and Medicare with every paycheck. For W-2 wage earners, 6.2% of your paycheck -- up to a limit of $147,000 in 2022 -- goes toward Social Security, while 1.45% goes toward Medicare. Your employer is taxed at the same rates.
If you're self-employed, you're both the employer and the employee, so you're taxed twice this amount. That's 12.4% for Social Security (up to the same limit) and 2.9% for Medicare (with no limit) for a combined payroll tax rate of 15.3%.
After a lifetime of hard work, you get this money back in the form of monthly Social Security payments that kick in as early as age 62 and Medicare benefits that begin at age 65. While you may have heard that Medicare Part A is free, that's only partly true. Though the premium is free, this portion of Medicare still charges deductibles and coinsurance -- all of which are out-of-pocket costs that you'll have to foot by yourself.
Source Fool.com
