How much will you pay for Medicare Part B premiums in 2016?

The approximately 70% of Medicare beneficiaries who have Part B premiums withheld from their Social Security checks will continue paying $104.90 a month for Part B. Those who aren’t collecting Social Security yet or will enroll in Medicare in 2016 will have to pay $121.80 a month in 2016 – a monthly premium that also applies to people who are eligible for both Medicare and Medicaid and have their premiums paid for by their state.  But you will pay anywhere between $170.50 and $389.80 per month if your income exceeds certain limits.

The good news is that premiums are not as high as they were expected to be – at least compared to what might have been. Since Medicare Part B premiums are meant to cover 25% of total Part B costs every year, the monthly premium would have been $120.70 across the board in 2016 if the increase applied to everybody, the Medicare trustees’ report says. However, the majority of Medicare beneficiaries are protected by a 1987 law that prohibits Social Security benefits from being reduced because of an increase in Medicare premiums – known as the ‘hold-harmless provision.’  More often than not, the Social Security cost-of-living adjustment (COLA) covers Medicare cost increases. But low inflation due to falling oil prices means that monthly premiums will be capped at $104.90 for Medicare beneficiaries who have their premiums withheld from their Social Security benefits.

 

Income

2016 monthly premium

Single filer

Up to $85,000

$121.80 or $104.90 (if protected by the hold-harmless provision)

$85,001 - $107,000

$170.50

$107,001 - $160,000

$243.60

$160,001 - $214,000

$316.70

More than $214,000

$389.80

 

Joint filers

Up to $170,000

$121.80 or $104.90 (if protected by the hold-harmless provision)

$170,001 - $214,000

$170.50

$214,001 - $320,000

$243.60

$320,001 - $428,000

$316.70

More than $428,000

$389.80

 

The other 30% of Medicare beneficiaries who in theory would have had to cover the rest of the cost of Part B – and who would have seen their premiums rise by 52% to $159.30 a month in 2016 – will instead be subject to a 16% increase, thanks to pressure from retiree advocacy groups that prompted President Obama to sign the Bipartisan Budget Act of 2015 on November 2nd that reduced the increase for 2016. “By historical standards it (16%) is a very, very large increase,” health policy expert at the American Enterprise Institute Joe Antos said. “It’s not as much as it would have been, but it’s big.” In order to help cover the difference, a $3 surcharge included in the $121.80 premium will be added to monthly Part B premiums for the next couple of years. Those protected by the hold-harmless provision will not pay that surcharge this year, but it may be added to their premiums in 2017 if there is a Social Security COLA next year.

Single or joint filers with modified adjusted gross income – which includes all taxable income, whether from a job, interest, dividends, capital gains or a pension – exceeding $85,000 or $170,000 respectively, have had to pay a high-income surcharge since 2007. In 2016, these people will have to pay the $121.80 base amount as well as a high-income surcharge of $48.70 to $268 a month, depending on income. Income is generally based on your last tax return on file – for 2016 premiums, it would be the 2014 return. But the high-income surcharge may be reduced or eliminated if income has decreased since the last tax return as a result of certain life-changing events, for example the death of a spouse, divorce, retirement or decreased work hours. In such a case, Social Security may use your more recent income instead, provided that you get in touch with the Social Security Administration, estimate your 2015 income, and offer proof of those changes, e.g. marriage or death certificate, a signed statement of retirement from an employer, or pay stubs showing decreased income.

Medicare Part B covers such things as clinical research, ambulance services, mental health, getting a second opinion prior to surgery, limited outpatient prescription drugs, and durable medical equipment (DME). DME includes blood sugar monitors and test strips, canes, commodes, crutches, manual wheelchairs and power mobility devices, nebulizers, suction pumps, traction equipment, walkers, and other home care medical supplies. Coincidentally, these and more are available at Discount Medical Supplies, and while our medical supply store does not accept Medicare, we do offer the lowest guaranteed prices. So if you can’t/won’t sign up for Medicare and are looking where to get inexpensive medical supplies, look no more.

Related: Came for hospital equipment supplies, stayed for insurance