How are Medicare premiums determined each year? Sometimes there is an increase, and other times there’s not (at least for some).
medicare part b premiums
The 52% Medicare Premium Increase by the Numbers
By now if you’re a Medicare recipient I’m sure you’ve heard all about the potential 52% Medicare Premium increase coming in 2016 for some recipients. This is due to a virtually-unknown (until recently) part of the law that allows no increase to Medicare premiums if there is no COLA adjustment to Social Security benefits being currently received. This happened in 2010 and 2011 when there was no COLA added for Social Security recipients – it just wasn’t the headline grabbing 52% number. As a result of this lack of increase for 70% of all Medicare Part B recipients, all other Medicare Part B premium payers must pick up the slack. The increase to premium is projected to be a maximum of 52% – from $104.90 to $159.40. Who is impacted? Primarily only those people who are over age 65, receiving Part B Medicare coverage and who are not currently receiving Social […]
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File For Part B Medicare – COBRA Isn’t Enough
For most folks, when you reach age 65 and have ceased regular work, filing for Medicare Parts A & B is an automatic thing. If you don’t file during the 3 months before or after your 65th birthday, you may have penalties to pay. This applies even if you have recently been laid off of work and are covered for health insurance under a COBRA plan. Part A carries no cost if you’re fully covered (40 quarters of coverage), but Part B requires a monthly premium. When laid off from an employer who has provided health insurance coverage to you while employed, you have the option of continuing the health coverage for a period of time, up to two years. This continuation of coverage is called COBRA, named for the law that put it into place (Consolidated Omnibus Budget Reconciliation Act). You have to file in a timely manner for […]
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Medicare Part B
The next letter in our Medicare alphabet soup is Part B. Part B is essentially medical insurance that covers doctor’s services, outpatient care, home health services, and durable medical equipment. It will also cover some other services as well as well as many preventative services. As far as what doctors will and will not cover Part B depends on whether or not they have agreed to assignment. Assignment is simply your doctor or another health care provider agreeing to be paid directly by Medicare and be willing to accept the payment amount that Medicare decides is the value of the service. Agreement also means the doctor or health care provider cannot charge you any more than what the deductible and coinsurance amounts are. The basic cost for Medicare Part B for 2013 is $104.90 monthly. Individuals with higher AGI may end up paying more. The table below, courtesy of Medicare.gov shows […]
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The ABC’s (and D’s) of Medicare
With more and more baby boomers retiring, more and more people including the Boomers, and their children and families are going to have questions and concerns about Medicare. Questions can range from what Medicare is, what it does, what it doesn’t do, and the nuances that make up our nation’s health care for retirees. Medicare was created in 1965 by the Social Security Act and was signed into law by Lyndon Johnson. Currently, Medicare is funded via taxation and premiums paid by Medicare subscriber. Part A – which we will cover in a future article, is funded by a 2.9% tax on wages. Unlike Social Security tax that has a limit or cap on the amount of income that can be taxed ($110,100 in 2012 and $113,700 in 2013), Medicare has no such wage base. The 2.9% tax is on an unlimited amount of earnings. Eligibility for Medicare typically starts for […]
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An Unexpected Result From Roth Conversion – Increased Medicare Premiums
Many folks took advantage of the one-time opportunity in 2010 to convert funds from traditional IRAs to Roth IRAs and subsequently spread the tax over the following two years, 2011 and 2012. This was a very good option for some folks who wanted to do the conversion and reduce future tax costs. However (and there’s always a however in life!), with the coming of 2013, many of these same folks are experiencing an unexpected result of the conversions: a significant increase in Medicare Part B premiums. Beginning after 2003, Medicare Part B premiums have been partly determined by income – primarily higher income. For 2013, the increased Part B premium begins for single folks with incomes above $85,000, married couples above $170,000. The income used to calculate the Part B premium is always based on the most recent tax return, which in this case would be the 2011 tax return. […]
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