The following article was written by Emily Brandon on March 23, 2018.She is a staff writer for U.S. News and world report. I believe sharing this information will be helpful for some who may have missed the article online or in print.
By: Emily Brandon, Staff Writer
THE STANDARD MEDICARE Part B monthly premium will be $134 in 2018 (or higher, depending on your income), the same amount as in 2017. But many beneficiaries who have been paying less than the standard rate for the past several years will see a jump in their premiums. Here's a look at how much you can expect to pay for Medicare Part B premiums in 2018.
Held harmless. Medicare Part B payments are prevented by law from reducing Social Security payments by Social Security's "hold harmless" provision. Social Security recipients only received a 0.3 percent cost-of-living adjustment in 2017, so they continued to pay premiums that were less than the standard rate charged to new enrollees and other people not protected by Social Security's "hold harmless" rule. Now that Social Security beneficiaries will receive a 2 percent cost-of-living adjustment in 2018, much or all of the gain may go toward Medicare Part B premiums. "Part B enrollees who were held harmless in 2016 and 2017 will see an increase in the monthly Part B premium from the roughly $109, on average, they paid in 2017," according to a statement from the Centers for Medicare and Medicaid Services.
The Centers for Medicare and Medicaid Services estimates that 42 percent of Medicare Part B beneficiaries will see their Medicare premiums grow to $134 because the cost-of-living adjustment to their Social Security benefit will be greater than or equal to the amount that is necessary to increase their Medicare premium to the standard rate. "The majority of people who were protected by hold harmless will see a fairly significant increase in their premiums. That's because their Social Security cost-of-living adjustment is large enough to cover the Medicare increase," says Tricia Neuman, director of the Program on Medicare Policy at the Kaiser Family Foundation. "For some, it will take up the full income from their Social Security cost-of-living adjustment." However, the CMS estimates that about 28 percent of Part B enrollees will continue to pay less than the full monthly premium of $134 because the increase in their Social Security benefit will not be large enough to cover the full Medicare Part B premium. "The hold harmless provision is designed to protect people so that the Part B premium doesn't result in a reduction in the Social Security check," Neuman says.
The standard rate. Medicare beneficiaries who newly enroll in Medicare in 2017 or 2018 pay the standard monthly premium of $134 per month. Those who signed up for Medicare without claiming Social Security benefits or who are directly billed for their Medicare Part B premium also pay the standard rate. Low-income beneficiaries who are eligible for both Medicare and Medicaid generally have their premiums paid by state Medicaid agencies. Medicaid pays the standard premium on behalf of the qualifying beneficiary.
High-income Medicare beneficiaries. Beneficiaries with high incomes are required to pay more for Medicare Part B. Those with an income that exceeds $85,000 as an individual or $170,000 for married couples have $53.50 added to their monthly rate for a total premium of $187.50. Seniors with retirement income between $107,000 and $133,500 ($214,000 to $267,000 for couples) must pay $267.90 per month for Medicare Part B in 2018, and monthly premiums further increase to $348.30 per month for beneficiaries bringing in between $133,500 and $160,000 ($267,000 to $320,000 for couples). Wealthy beneficiaries with incomes above $160,000 ($320,000 for couples) must pay $428.60 per month for Medicare Part B.
INCOME PART B MONTHLY PREMIUM AMOUNT
Individuals with income between $85,000 to $107,000 or married couples with income between $170,000 to $214,000 Standard premium + $53.50 = $187.50
Individuals with income between $107,000 to $133,500 or married couples with income between $214,000 to $267,000 Standard premium + $133.90 = $267.90
Individuals with income between $133,500 to $160,000 or married couples with income between $267,000 to $320,000 Standard premium + $214.30 = $348.30
Individuals with income above $160,000 or married couples with income above $320,000 Standard premium + $294.60 = $428.60
[Read: Medicare Enrollment Deadlines You Shouldn't Miss.]
Late enrollees. You first become eligible to sign up for Medicare Part B during the three months before your 65th birthday, your birthday month and three months after the month you turn 65. If you sign up later, and you weren't covered by a group health insurance plan through your or a spouse's job while you delayed enrolling, you will be charged a 10 percent late enrollment penalty for each 12-month period you were eligible for Medicare Part B but delayed enrolling. For example, if your initial enrollment period ended on September 30, 2015, but you don't sign up for Medicare Part B until March 2018, your premiums will be 20 percent higher as long as you are enrolled in Medicare due to two full years of delayed enrollment. In this case, the late enrollment penalty would increase the 2018 premium from $134 to $160.80 per month. "Some people miss their enrollment period, and unless they are covered by active employment, they will get a penalty," says Leslie Fried, senior director of the Center for Benefits Access at the National Council on Aging. "If you are five years late and you didn't have other insurance through active employment, then you could be hit with an additional 50 percent penalty."
The opinions voiced in this material are for general information only and are not intended to provide specific advice regarding Medicare or recommendations for any individual.