Medicare Part B Monthly Premium 2016
Actually, these numbers are valid for most persons on Medicare. You will have to pay a higher premium if you filed an individual tax return last year and reported income over $85,000 or $170,000 for a joint return. Depending on the amount of your taxable income, you may have to pay between $170.50 up to the maximum Part B premium of $389.80 per person. Fortunately, income-related adjustments affect less than 5 percent of Medicare beneficiaries. If you have to pay a higher Part B premium because of your income, you should be notified by Social Security.
Medicare Part B Releases Official 2016 Premiums
The standard $121.80-a-month premium, though still a hefty increase, is much less than the $159.30 a month — an unprecedented 52 percent hike — that was projected in the Medicare Trustees’ report to Congress in July. That amount represented actuarial estimates of how much the Part B program, which covers doctors’ services and outpatient care, will cost next year. Part B premiums are required by law to cover 25 percent of those costs, with the federal government paying the rest out of general revenue.
Medicare Part B Premiums in 2016
The premiums are not as high as they were expected to be. Because Medicare Part B premiums are designed to cover 25% of total Part B costs each year, the monthly premium would have been $120.70 across the board in 2016 if everyone were on the hook for the increase, according to the Medicare trustees’ report. But most Medicare beneficiaries are protected by the “hold-harmless provision,” a law that prohibits Social Security benefits from being reduced because of an increase in Medicare premiums. In most years, Medicare cost increases are covered by the Social Security cost-of-living adjustment. But there will be no Social Security COLA for 2016 because of low inflation, which means that the monthly premiums will be capped at $104.90 for Medicare beneficiaries who have their premiums withheld from their Social Security benefits.
Some Retirees Pay Higher Medicare Premiums in 2016
New enrollees. Retirees who sign up for Medicare in 2016 will pay $121.80 for Medicare Part B, $16.90 more per month than existing Social Security recipients. This group includes people who will turn 65 in 2016 and employees who worked past age 65 at a job with group health insurance, but will switch to Medicare in 2016. The Bipartisan Budget Act of 2015 prevented a much higher premium increase to $159.30 for new beneficiaries. This law modified how Part B premiums are calculated for 2016. General tax revenue will be used to cover the costs of the premium reduction, but all Part B enrollees will repay this amount over time through small surcharges added to their premiums until the money is repaid.
2016 Medicare Part B Premium Spike
As problematic as the uneven application of the premium increase is, the evidence suggests that perhaps Congress was trying to solve the wrong problem with the Hold Harmless provision. In recent years there has been a substantial shift in the way medical care is provided. An emphasis on early screenings and prevention has moved patients from Part A-covered emergency rooms to their doctors’ offices. New drugs and the rising industry of outpatient clinics have moved patients from hospital beds to home recovery. And when the time comes, a preference for home health care or hospice care has replaced expensive end of life inpatient treatment. These are all demonstrated shifts from premium-free Part A services, to Part B covered care. Though health care costs are undoubtedly rising for many reasons, including the graying of the boomer generation, much of the increase in Part B costs may be attributable to positive gains in the health care industry since 1988 and earlier. Rather than encouraging continued use of expensive and less efficient hospital services, Congress should incentivize, not punish, increased reliance on these Part B covered services.
Surprise! Your Medicare Part B premiums may increase by 50 percent in 2016
Medicare Advantage (MA) must cover at least everything covered by Original Medicare (Part A for hospital and Part B for doctors, outpatient services and medical equipment). Most Medicare Advantage plans offer more coverage, including dental, vision and built-in Part D drug plans (a Part D plan is a separate policy for people on Original Medicare). The reasons Medicare Advantage plans can offer more coverage is complicated, but one major reason is that most Medicare Advantage plans save money by requiring you to use doctors, hospitals and other providers who are in their local network. Original Medicare, which often is also called fee-for-service Medicare, lets you use participating doctors and other health care providers anywhere in the country.