retirement

Medicare Premiums to Increase

Expect to pay more next year for the government's Part B medical coverage.

What are the Medicare Part B premiums going to be in 2008?

For the second year, the premiums for Medicare Part B will vary based on your income. Medicare Part B is the government's medical insurance that covers doctors' services, outpatient care and medical services that Medicare Part A doesn't cover.

The standard Part B monthly premium will be $96.40 in 2008, which is $2.90 more than last year's premium (a 3.1% increase).

But those rates only apply to single filers whose adjusted gross income was $82,000 or less in 2006, or $164,000 or less if married filing jointly. Everyone else pays higher premiums.

These are the monthly premiums for single and joint filers based on 2006 income:

New Medicare Part B Prices

SINGLE FILER INCOMEJOINT FILER INCOMEMONTHLY MEDICARE PART B PREMIUM
$82,200 or less$164,000 or less$96.40
$82,201 - $102,000$164,001 - $204,000$122.20
$102,001 - $153,000$204,001 - $306,000$160.90
$153,001 - $205,000$306,001 - $410,000$199.70
More than $205,000More than $410,000$238.40

These premiums are based on 2006 income because that is the most recent tax return on file with the IRS. If your income has decreased significantly since then because of certain "life-changing events," you may be able to ask the government to use your income from a more-recent tax year to calculate your premiums. Call the Social Security Administration at (800) 772-1213 and explain your situation.

For more information about contesting your new Medicare premiums, see my column on the topic from last year.

Interestingly, the Social Security cost-of-living adjustments for 2008 were also announced recently. Social Security benefits will increase by only 2.3% in 2008 -- while the basic Medicare Part B premium is rising by 3.1%.

For more information about the 2008 Social Security cost-of-living changes, see the Social Security COLA Factsheet.

For details about the 2008 Medicare Part B premiums, as well as the increases in Medicare co-payments and deductibles, see the Medicare FAQs about 2008 premiums and insurance rates at Medicare.gov.

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