Monthly Archives: January 2018

2018 Part B Premiums

In the fall of 2017, the Centers of Health and Human Services announced they would not be increasing the standard Part B premium for 2018. However, many Medicare beneficiaries saw their Part B premium rise. What happened?

Medicare is not allowed to hike Part B premiums if social security benefits do not increase. They call it the ‘Hold Harmless Agreement’, and the purpose is to not decrease the recipient’s net monthly social security check. Two years ago there was no social security increase; last year it was .3%, which was too small for Medicare to take action.

When the Social Security Administration announced a 2% cost of living adjustment for 2018, it increased the average social security payment $27/month. This allowed Medicare to bring the 70% of those paying $109/month up to the 2017 standard Part B premium of $134.

For some higher income earners, the Part B premium jump was more drastic. It wasn’t that Medicare increased premiums, but they did squeeze the brackets. Formerly, Medicare had five income brackets with corresponding Part B premiums. Those in the lower two brackets, and those in the highest one, will not notice a change. But for individuals who earned between $133,500 and $160,000, and couples who earned between $267,000 and $320,000, in 2016, their premium went from $267.90/person to $348.30/person; a 60% jump.

For individuals earning between $160,000 and $214,000, (couples between $320,000 and $428,000), their bracket was eliminated and they will pay the highest rate of $428.60/person; an $80.30/month increase. Couples who reported an adjusted gross income greater than $320,000 in 2016, will have Part B premium payments of more than $10,000/year.

If those Part B premium hikes were not enough, those folks in the squeezed brackets also get bumped on their monthly income related adjustment for Part D. Their added premiums for their prescription drug plans will now be $55.20 and $76.20 respectively.