A 52% increase in Medicare Part B premiums is anticipated next year for about 30% of all participants. Nearly everyone older than 65 is on Medicare, so this huge change will affect 12 million or more Americans.
And it’s all thanks to legislative changes by our politicians, who get virtually free healthcare for life. Most seniors (about 70%) will pay $104.90 a month, or, oddly, $147 monthly just for the first year.
The current Part B premium schedule follows. For those unaware of it, the premiums are based on how much you earn. The more you make in retirement income, the more you pay in premiums. If you make very little you pay no premiums.
|If your yearly income in 2013 (for what you pay in 2015) monthly was:||2015|
|File individual tax return||File joint tax return||File married & separate tax return|
|$85,000 or less||$170,000 or less||$85,000 or less||$104.90|
|above $85,000 up to $107,000||above $170,000 up to $214,000||Not applicable||$146.90|
|above $107,000 up to $160,000||above $214,000 up to $320,000||Not applicable||$209.80|
|above $160,000 up to $214,000||above $320,000 up to $428,000||above $85,000 up to $129,000||$272.70|
|above $214,000||above $428,000||above $129,000||$335.70|
The Medicare monthly premiums above are those without the rate hike.
With the planned 52% rate hike:
- $146.90 jumps to $223 monthly, or $2,676 a year.
- $209.80 jumps to $318 monthly, or $3,816 a year
- $272.70 jumps to $414.20 monthly, or $4,970.40 a year
- $335.70 jumps to $509.80 monthly, or $6,117.60 a year.
As part of the Medicare Access and CHIP Re-authorization Act of 2015, in 2018 (at that time “where’s Obama”) the third income bracket (from $107,000 to $160,000) will be split into two, and this new third bracket plus the fourth immediately above it will face an even higher income-related adjustment down the road on both Part B and Part D premiums. Notice that the government increased premiums for seniors to pay for a children’s program, instead of taking the money out of general (income tax) funds.
While Congress pretends to not raise taxes, they always mean just those dreaded-by-the-rich income taxes. Dozens of taxes and fees have increased, but nothing had such impact as this Part B hike. And this coming year, there will be no cost of living increase for seniors, and most of them must wonder how healthcare costs have risen 7.6% this year and the cost of educating grandchildren is at least 10% more, but COLA increase disappeared.
Medicare Part B pays only 80% for doctor expenses after a deductible. About 26% of GPs currently refuse to accept new Medicare patients, arguing that private health plans pay them much more for treatments. The private sector economy promoters are very wrong in this instance..
For seniors, Part D Medicare premiums are additional and pay a small portion of prescription costs for most ill patients, requiring more than $4,700 in out-of-pocket payments before a catastrophic plan kicks in to pay most of the expense. With popular drugs at $300 to $400 each, monthly, the expense adds up quickly for the middle class elderly.
Medicare Part A pays hospital costs, but requires more than $1,000 initial co-pay for most admissions, and other charges.
Nothing in Medicare Parts A, B, C or D pays for dental, eyeglasses, hearing aids or nursing homes (about $76k average a year per person), so many seniors buy “supplemental” plans for thousands of dollars more each year to provide better coverage and offset the co-insurance in Part B of 20%. None of those extra plans cover nursing homes, however.
The next time some errant politician like Rubio or Christie says we must cut Medicare, raise the eligibility age, slice benefits and hike premiums even more, copy this blog posting and send it to them. It won’t change their mind, but perhaps their secretary or oppressed clerk will at least know what’s in store for them at retirement.