Retiree Budget-Buster: Big Price Hikes for Medicare Premiums in 2016
Some Medicare beneficiaries could see their rates jump by more than 50%.
Retirees, adjust your budget: Double-digit price hikes for Medicare Part B premiums are coming next year.
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The actual rates for Part B (which covers the costs of doctor visits and outpatient care) will be announced in October and take effect Jan. 1. The boost may be 15% for all participants or a whopping 52% for some, depending on whether Social Security recipients see a cost-of-living raise for 2016.
If Social Security checks are increased, everybody will pay more for Part B, bumping the monthly premium from $104.90 to $120.70 to cover higher expenses. That’s the scenario for a 15% increase in costs.
But without a raise in Social Security benefits, higher Medicare fees couldn’t be charged to most folks. So the larger increase would apply to about 30% of Medicare beneficiaries:
- those who enroll in Part B in 2016,
- people who don’t have their premiums deducted from Social Security payments,
- individuals with annual incomes above $85,000,
- and people eligible for both Medicare and Medicaid.
For the last group, known as “dual eligibles,” Part B premiums are paid by the state where they live.
Medicare beneficiaries in these groups would see bills jump to $159.30 a month unless the Obama administration took steps to lessen the pain. That’s possible, but not certain.