Medicare

Medicare Premiums to Rise Slightly in 2019

A possible workaround: See if you qualify for a Medicare surcharge waiver.

If you're enrolled in Medicare, expect to pay a bit more next year. Many beneficiaries will see some increase in their monthly Medicare Part B premiums. High-income retirees will also see a slight hike in income-related surcharges, with the biggest spike for those in the new top tier in effect in 2019.

The monthly standard Part B premium rises to $135.50 in 2019, up 1% from 2018. New Medicare enrollees, those who don’t get Social Security and those who are directly billed for Part B premiums are automatically subject to the standard premium. Part B covers doctor visits and outpatient hospital services.

Most beneficiaries receiving Social Security won’t be protected by the “hold harmless” provision in 2019. That provision keeps beneficiaries’ Part B premium increase from exceeding the increase in their Social Security benefits if premiums are automatically deducted from benefits. With a 2.8% cost-of-living adjustment for Social Security and slight hikes to Medicare premiums for 2019, only about 2 million beneficiaries, or about 3.5%, will pay less than the standard monthly premium because of the hold-harmless provision.

Another 5% of beneficiaries will pay more: High-income beneficiaries pay a monthly income-related adjustment on top of the standard Part B premium, as well as a surcharge on their Part D prescription-drug plan premiums. See the box below for 2019 details.

Surcharges start to kick in for single filers with more than $85,000 in modified adjusted gross income—that is, AGI plus tax-exempt interest—and married couples filing jointly with more than $170,000 in MAGI. In the bottom four tiers, the surcharge increases about 1%, or a few dollars a month in 2019. For instance, the first surcharge tier climbs $2.10 a month, to a total monthly premium of $189.60. For joint filers, the premium surcharges are applied to each spouse on Medicare.

Those who land in the new top tier face the biggest premium spike. You vault into the top, fifth tier if you have MAGI of $500,000 or more for single filers or $750,000 or more for joint filers. Beneficiaries in that new top tier will pay $460.50 a month for Part B in 2019—a 7% jump from what they would have paid at the same income level in 2018.

A bit of good news for high-income beneficiaries: Part D premium surcharges fall about 5% in 2019 for those in the bottom four tiers. In the first tier, for instance, the Part D surcharge drops to $12.40 a month, compared with $13 in 2018. But again, if you fall into the new top tier, you’ll pay about 3% more than in 2018.

Qualifying for a Surcharge Waiver

Medicare premium surcharges are based on information from your tax return two years prior—so there’s little wiggle room now to escape a 2019 surcharge.

But not all hope is lost. See if you qualify for relief because of a life-changing event such as death of a spouse or retirement. Such events can make you eligible to use your current, lower income and avoid the surcharge. Learn more at socialsecurity.gov.

If you experienced one of those events since your 2017 tax return was filed, file Form SSA-44 with the Social Security Administration and provide the appropriate documentation, such as a letter from your former employer noting your retirement.

If you are in 2019 surcharge territory because of a windfall—say, a large profit from selling appreciated stock or a house—you are out of luck, at least for one year. One-time spikes in income don’t qualify for a waiver. But the pain should be brief. Medicare premiums are determined annually, and the surcharge will drop off in 2020 if your 2018 income falls below the surcharge income thresholds.

1218_KRR.indd
1218_KRR.indd

Getty Images

Most Popular

Is the Stock Market a House of Cards?
investing

Is the Stock Market a House of Cards?

The stock market volatility we’ve been experiencing and the apparent disconnect with the broader economy have some investors wondering just that. But …
October 12, 2020
Stock Market Holidays in 2020
Markets

Stock Market Holidays in 2020

Is the stock market open today? Take a look at which days the NYSE, Nasdaq and bond markets take off in 2020.
October 12, 2020
10 Worst Things to Keep in Your Wallet
Scams

10 Worst Things to Keep in Your Wallet

Storing your passport book or card, a spare key, or any of these other important items in your wallet leaves you open to identity theft -- or worse.
October 9, 2020

Recommended

10 Worst Things to Keep in Your Wallet
Scams

10 Worst Things to Keep in Your Wallet

Storing your passport book or card, a spare key, or any of these other important items in your wallet leaves you open to identity theft -- or worse.
October 9, 2020
7 Things Medicare Doesn’t Cover
Healthy Living on a Budget

7 Things Medicare Doesn’t Cover

Medicare Part A and Part B leave some pretty significant gaps in your health-care coverage. Here's a closer look at what isn't covered by Medicare.
October 1, 2020
11 Costly Medicare Mistakes You Should Avoid Making
Medicare

11 Costly Medicare Mistakes You Should Avoid Making

If you don't make the right choices to fill in the health coverage gaps, you could end up with high Medicare premiums and big out-of-pocket costs.
October 1, 2020
Your Guide to Open Enrollment
health insurance

Your Guide to Open Enrollment

Your options may look a little different this fall. Meanwhile, the cost of coverage continues to climb.
October 1, 2020