The announcement in early October of no Cost of Living Adjustment for Social Security carried the double whammy of hitting some 30% of Medicare Part B participants with an astronomical 52% increase in their premium. This raised the hackles of many seniors, and pushed Congress to include a fix in their recent Budget agreement.
In summary, a part of the Bipartisan Budget Act of 2015 helped to reduce the increase from 52% to “only” 18% for 2016. Rather than seeing their monthly premium increase to nearly $160/month, new enrollees to Medicare in 2016 and current enrollees whose premium is not directly deducted from Social Security (the majority of the 30% that would be affected) will instead see their premium increase to just $123.70. This change was taken care of in part by spreading the additional cost over the coming five years at a $3 per month surcharge for the 2 groups previously mentioned.
However, everyone will share in the pain of the deductible rising. All Medicare Part B recipients’ deductible will rise by $20 to $167 for 2016 (this was originally scheduled to rise to $223, but under the Bipartisan Budget Act of 2015 was reduced).
Below is a concise breakdown of what all this might mean to your situation. Originally posted by Jim Blankenship, the table details the different premiums that apply given how you pay your premium and your income level.
How may I be affected?
It depends on your income tax filing status, your household income on your tax return, and whether or not you’re receiving Social Security benefits and having your Part B premium deducted from the monthly check. (Incidentally, if you are receiving Social Security and are not having the Part B premium deducted but are paying directly, you should change this asap to avoid paying extra!)
If you’re delaying your Social Security benefits while paying your Part B premium directly, this increase will affect you. Plus, regardless of your Social Security filing status, if you’re in the upper income levels (see below) you’ll see an increase to your Part B premium (plus the $3 surcharge) as well.
The lowest Medicare Part B premium is found for folks who have an income of less than $85,000 (single) or $170,000 (married filing jointly). At income levels above that, the Part B premium increases.
The table below outlines the premium amounts for the various income levels and filing statuses: