Will You Pay (Lots) More in Part B Premiums?

October 16, 2015

70 percent of Medicare beneficiaries will be happy to know they won’t see a Medicare Part B premium increase in 2016. If you’re paying $104.90 a month in 2015, you’ll pay the same next year (unless you had a big jump in your 2014 income—see below).

But it’s quite another story for the other 30 percent, who will see a 52 percent hike over what they’re paying now.

How can this happen?

The law says, in years when there’s no Social Security COLA, Part B premiums can’t be raised, either.

But that protection doesn’t apply to everybody. The law doesn’t protect the following groups:

  • new Medicare enrollees in 2016 (who aren’t grandfathered because they never paid the lower premium);
  • Medicare enrollees with incomes above $85,000 a year ($170,000 for a married couple), who already pay premiums higher than the basic $104.90; and
  • people who suspended or delayed their Social Security benefits (your Social Security check can’t be protected against reduction if you’re not getting a check).

So why the huge 52 percent increase for these non-grandfathered groups?

While one part of the law protects the 70 percent from premium hikes if there’s no COLA, another says total premiums collected still have to cover the same total amount that would be collected if there were no grandfathering.

For 2016, that means premiums for the unprotected 30 percent must be raised enough to cover the grandfathered people’s share, too.

That’s the law.

The chart below shows how much that will change 2016 premiums for the various groups.

For the first line of the chart, the only people who will be hit with the $159 premium are those who will enroll in Part B for the first time in 2016.

It’s also important to know that the income thresholds for the higher-income 2016 premiums are determined by the adjusted gross income on your 2014 federal tax return – the latest one the IRS has on file.

Medicare Premiums 2016

In addition, 2016 will see a hike in the Part B deductible—up to $223 from this year’s $147. There’s no grandfathering for the deductible increase. It will affect all beneficiaries.

The law covering the disproportional Part B hikes isn’t anything new. The same thing happened when there was no COLA in 2010 and 2011.

The cold comfort is the next time we see a positive annual COLA – hopefully for 2017 – the normal premium relationships will be restored. That is, the people being made to overpay in 2016 will actually see their premiums drop, as they did after the previous zero-COLA years.

Law or no law, MOAA thinks it’s wrong to foist the whole premium load on the few – and some in Congress agree.

Sen. Ron Wyden (D-Ore.) and Rep. Dina Titus (D-Nev.) have sponsored legislation in their respective chambers to extend the grandfathering protection to all Medicare beneficiaries.

Act now to send your elected officials a MOAA-suggested message, urging them to support these bills and protect all Medicare beneficiaries in 2016.

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