If the federal government doesn’t prevent it, the rate increase will take effect in 2016. Find out if you will be affected.

Three groups will likely see higher premiums:

  1. Those new to Medicare in 2016
  2. Those whose Part B is not paid through Social Security
  3. Those with single incomes over $85,000 (or joint incomes over $170,000)

Why might premiums increase?

Medicare’s guidelines require that the prices of Part B premiums cover 25% of Part B expenses. The majority of Medicare beneficiaries pay their Part B premiums through Social Security. There’s a rule that prevents Medicare beneficiaries who pay the lowest amount for Part B from being charged more unless their Social Security is given a Cost of Living Adjustment. This year, a Cost of Living Adjustment is not expected due to low levels of inflation. 70% of Medicare beneficiaries fall into this category, and their premiums can’t be increased. The remaining 30% face a price hike to reach the necessary quota.

What are the chances that the increases won’t occur?

No one can say for sure, but the U.S. Department of Health and Human Services can intervene until this October, when the rates will be finalized. The HHS Secretary has expressed that she would like to prevent an increase of this scope, and could lower the rates if there is enough money in Medicare’s program funds.

Seniors new to Medicare with incomes…

Less than $85,000 ($170,000 if joint)

Could see premiums rise from…

$104.90 to $159.30

Seniors already in Medicare with incomes from…

$85,000 – $107,000 ($170,000 – $214,000 if joint)

$107,000 – $160,000 ($214,000 – $320,000 if joint)

$160,000 – $214,000 ($320,000 – $428,000 if joint)

$214,000 and up ($428,000 and up,
if joint)

Could see premiums rise from…

$146.90 to $233.00

$209.80 to $318.60

$272.20 to $414.20

$335.70 to $507.80

Are you in any of these categories? This article from Time.com has three options to consider to avoid
the rate increase.

For more information on the potential premium increases, click here.

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