In recent years, there have been many projections of skyrocketing Medicare Part B premiums, most of which have proven to be inaccurate. Part B premiums are, however, changing for 2017, so how will it affect you?
First of all, Medicare is required by law to charge Part B premiums high enough to cover 25% of its projected Part B expenses. So, when health care costs rise, so do Part B premiums.
However, there is a “hold harmless” provision that project Medicare beneficiaries from higher Part B premiums if there is no corresponding Social Security cost-of-living increase (COLA). For 2016, there was no cost-of-living increase (COLA) to Social Security. The “hold harmless” provision only applies to approximately 70% of people on Medicare. Several groups don’t get the benefit of that provision, and thus, subject to the higher Medicare Part B premiums. Those groups are:
- New Medicare beneficiaries (i.e. turning 65 or going on Medicare Part B for the first time in 2016).
- Individuals or households who have incomes that are higher than $85,000 per year (or $170,000 for couples).
- People who have chosen to pay Medicare Part B premiums directly rather than have them deducted from a Social Security check (either by choice or because they are not receiving Social Security).
If you are in the 30% that didn’t benefit from “hold harmless” in 2016 or are new to Medicare in 2017, you will pay the new Medicare Part B premium of $134/month. For 2017, the standard Part B premium is the $134/month figure.
However, if you are in that 70% that benefited from the “hold harmless” provision in 2016, you paid $104.90/month in 2016. In 2017, your Medicare Part B premium will increase to $109/month.
Keep in mind that Medicare Part B premiums do change based on income (IRMAA). The chart that shows these premium income levels and corresponding changes, for both Part B and Part D, is listed below:
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