Medicare Premiums for 2016
By Elie Harriett
December 14, 2015Every year, Medicare increases the premiums for Part B. If you are collecting Social Security, you are probably having this premium deducted automatically out of your social security check. Otherwise, you are paying it either electronically or in three-month increments. The Medicare agency considers increasing the premiums to keep up with the cost of healthcare. In 2016, the premium will be a little bit more complicated than it has been in the past. Let’s take a look at how these costs will breakdown.
As most people are already aware, there will no Social Security cost of living increase for 2016. As a result, by law, most people with Medicare Part B will be held harmless from any increase in premiums in 2016 and will pay the same monthly premium as last year, which is $104.90. We’ll get to “held harmless” in a moment. Just be aware that if your Medicare premium is being deducted from your social security check, and you are only paying $104.90 in 2015, there is a very good chance you will continue to pay that same amount in 2016.
For everyone not “held harmless,” which are mostly people currently paying more than $104.90, people not having their premiums deducted from their social security, and people not yet on Medicare part B, their premiums will be increased to $121.80. Medicare estimates that approximately 30% of all Americans will not be “held harmless,” meaning the majority of people on Medicare will not be subject to this increase.
If your household income is greater than $85,000, your Medicare Part B premiums might be higher still. For households with incomes greater than that amount, the Medicare Part B premium could gradually increase to a maximum of $389.80 per month. If your household income is above $85,000, we recommend contacting a knowledgeable insurance advisor, or Social Security, to determine what options, if any, may be available to you for lowering your premium.
The “Hold Harmless” provision is a law which states that anyone receiving social security during years when they do not receive an increase in their benefits, and paying Medicare Part B premiums with their social security are not allowed to receive an increase in their Medicare Part B premium. Simply put: the government will not penalize you because the cost of Medicare goes up but your social security does not. But the hold harmless provision does not apply to all Medicare beneficiaries. So if your Medicare is paid out of your pocket, you are new to Medicare part B, or you’re paying an additional premium to Medicare due to high income, you will receive the increase in your Part B premium for 2016.
Feel free to contact us with any questions regarding Medicare premiums for 2016.
