Luckily, Congress was able to pass the Bipartisan Budget Act on November 2, and the majority of Medicare Part B beneficiaries won’t see an increase in premiums. For those who were originally going to be affected by changes, the increase will be much more modest than originally anticipated.
Due to a clause in the Social Security act, about 70 percent of Medicare recipients will keep paying $104.90 per month for their Part B coverage. Premiums are tied to Social Security’s cost of living adjustments (COLA), and these recipients are “held harmless” from premium increases because there will be no COLA in 2016.
For the remaining 30 percent of Medicare beneficiaries, premiums will increase. You fall into this group if:
- You don’t receive Social Security benefits
- You will be receiving Medicare Part B for the first time in 2016
- You have both Medicare and Medicaid, with Medicaid paying your Medicare premiums
- Your modified adjusted gross income (AGI) from your 2014 tax return is above a certain threshold. Your filing status will matter, and the amount of your premium increase is tied to certain income brackets.
You probably already know if you fall into one of the first three groups. As for the fourth group, the bottom line is that you won’t see a premium increase if your AGI from 2014 was below $85,000 (if filing individually, or married filing separately) or $170,000 (if married filing jointly). If your income was above those amounts, you will see a premium increase. The exact amount will depend upon your tax bracket.
Other Medicare-related costs are set to increase in 2016, including:
- The Part B deductible for Original Medicare will increase from $147 to $166
- The monthly Part A premium will increase from $407 to $411, but most people don’t pay this premium
- The Part A deductible for inpatient hospitalization will increase from $1,260 to $1,288. Daily co-insurance amounts for hospital stays will also increase.
- Patients in skilled nursing facilities will pay a daily co-insurance amount of $161 for days 21 through 100 in a benefit period.
For more information on how your Medicare costs and help you discover how these changes will affect you.