What's in Store for Medicare Part B Premiums
Some people will have to pay more for coverage next year.
Will Medicare Part B premiums increase next year?
Medicare Part B premiums will continue to be $96.40 per month for most people in 2010, even though health-care costs are rising. That’s because most Medicare beneficiaries are protected by the “hold harmless” provision, which prevents Social Security checks from declining from one year to the next. Most people deduct their Part B premiums from their Social Security checks. There will be no cost-of-living increase to Social Security benefits in 2010, so their Medicare Part B premiums cannot increase, either. See A Bailout for Seniors for more information.
However, the hold-harmless provision does not apply to about 25% of Medicare beneficiaries -- including people who are new to Medicare in 2010, low-income beneficiaries whose premiums are paid by Medicaid, and high-income beneficiaries who pay a surcharge -- and their premiums could increase substantially. The Centers for Medicare and Medicaid Services recently announced that premiums for people who aren’t protected by the hold-harmless provision would jump by $14.10, to $110.50 per month, in 2010.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
High-income beneficiaries will pay even more, which has been the case since 2007, when income surcharges were added to the Part B premiums for beneficiaries above a certain income level. In 2010, the extra charge applies to Medicare beneficiaries with modified adjusted gross incomes of $85,000 or more ($170,000 or more if married filing jointly).
In 2010, people who earn more than $85,000 up to $107,000 (or married couples filing jointly who earn more than $170,000 up to $214,000) will pay $154.70 per month per person for Part B; people who earn more than $107,000 up to $160,000 ($214,000 up to $320,000 if filing jointly) will pay $221.00 per month per person; people who earn more than $160,000 up to $214,000 ($320,000 to $428,000 if filing jointly) will pay $287.00 per month per person; and those who earn more than $214,000 (more than $428,000 if filing jointly) will pay $353.60 per month per person. (See this table on the Medicare Web site for 2009 premiums.)
This big price hike may be tough to stomach in a year when Social Security payments won’t rise with inflation. The House of Representatives passed a bill on September 24 that would freeze Medicare Part B premiums at 2009 levels for everyone in 2010 -- even those who aren’t protected by the hold-harmless provision. High-income beneficiaries would still have to pay a surcharge, but their total costs would continue at 2009 levels, too (ranging from $134.90 to $308.30, depending on income, for single Medicare beneficiaries who earned more than $85,000, or more than $170,000 if married filing jointly). The Senate has not acted yet, although time is running out to make changes in time to adjust the first Social Security checks of 2010.
-
Stocks Chop as the Unemployment Rate Jumps: Stock Market TodayNovember job growth was stronger than expected, but sharp losses in October and a rising unemployment rate are worrying market participants.
-
Should You Renew Your CD?With rate cuts impacting earnings, we examine if now is a wise time to renew CDs.
-
7 Ways to Plan Now to Save on Medicare IRMAA Surcharges LaterUnderstand the critical two-year lookback period and why aggressive planning before you enroll in Medicare is the most effective way to minimize IRMAA.
-
Credit Report Error? They All Mattercredit & debt Don't dismiss a minor error. It could be the sign of something more serious.
-
Insurance for a Learning Driverinsurance Adding a teen driver to your plan will raise premiums, but there are things you can do to help reduce them.
-
529 Plans Aren’t Just for Kids529 Plans You don’t have to be college-age to use the money tax-free, but there are stipulations.
-
When to Transfer Ownership of a Custodial Accountsavings Before your child turns 18, you should check with your broker about the account's age of majority and termination.
-
Borrowers Get More Time to Repay 401(k) Loans
retirement If you leave your job while you have an outstanding 401(k) loan, Uncle Sam now gives you extra time to repay it -- thanks to the new tax law.
-
When It Pays to Buy Travel Insurance
Travel Investing in travel insurance can help recover some costs when your vacation gets ruined by a natural disaster, medical emergency or other catastrophe.
-
What Travel Insurance Covers When Planes Are Grounded
Travel Your travel insurance might help with some costs if your trip was delayed because of the recent grounding of Boeing 737 Max planes.
-
Ways to Spend Your Flexible Spending Account Money by March 15 Deadline
spending Many workers will be hitting the drugstore in the next few days to use up leftover flexible spending account money from 2018 so they don’t lose it.
