| Tue, Feb 14, 2017 @ 09:00 AM

The Truth about Your Medicare Part B Premium

Posted by Medicare Made Clear

medicare-part-b-premiumsYou probably know that your Medicare Part B premium can change each year. Do you know why? Or how the amount is calculated?

The Balanced Budget Act of 1997 set a formula for determining the standard Part B premium each year. The formula calculates the premium amount to cover 25 percent of the average projected Part B costs per beneficiary.

Part B Premiums for 2017

The standard Part B premium for 2017 is $134 per month. However, most people already on Medicare will pay less than this amount – around $109 – because of the hold harmless rule. The rule states that the Part B premium may not increase more than the Social Security cost-of-living increase in any given year.

You will not be held harmless and will pay the standard Part B premium if any one of the following applies to you:

  • You enroll in Part B for the first time in 2017.
  • You don’t get Social Security benefits.
  • You’re billed directly for your Part B premiums.
  • You have Medicare and Medicaid, and Medicaid pays your premiums. Your state will pay the standard premium amount of $134.

People with higher incomes are also not held harmless. They may pay more than the standard Part B premium amount due to an “income-related monthly adjustment.” The adjustment is based on adjusted gross income reported 2 years prior. Your 2015 tax return will determine your 2017 Part B premium.

The table below shows 2017 Part B premium amounts. Look for your tax filing status, individual or joint, and find your 2015 income in that column. Follow the row across to see what you will pay for Part B in 2017.

Individual tax return: 

2015 income

Joint tax return:

2015 income

2017 monthly Part B premium

$85,000 or less

$170,000 or less

$134.00

(if not held harmless)

$85,001 to $107,000

$170,001 to $214,000

$187.50

$107,001 to $160,000

$214,001 to $320,000

$267.90

$160,001 to $214,000

$320,001 to $428,000

$348.30

More than $214,000

More than $428,000

$428.60

How to Appeal a Part B Premium Income Adjustment

You may request an appeal if you disagree with a decision regarding your income-related monthly adjustment amount. Complete a Request for Reconsideration (Form SSA-561-U2) or contact your local Social Security office to file an appeal.

You may be able to skip the formal appeal and simply provide documentation if your income changed due to any of the following:

  • You married, divorced or became widowed.
  • You or your spouse stopped working or reduced your work hours.
  • You or your spouse lost income-producing property due to a disaster or other event beyond your control.
  • You or your spouse experienced a scheduled cessation, termination or reorganization of an employer’s pension plan.
  • You or your spouse received a settlement from an employer or former employer because of the employer’s closure, bankruptcy or reorganization.

These methods apply to the Part B premium. Contact the IRS if you disagree with your adjusted gross income amount, which is provided to Medicare by the IRS.

Conclusion

The Part B premium is calculated every year. You may see a change in the amount of your 2017 Social Security checks or in the premium bills you receive from Medicare. Check the amount you’re being charged and follow up with Medicare or the IRS if you have questions.

Related Content

5 Ways to Pay Your Medicare Part B Premium

Medicare Part B Coverage and Costs

Medicare Part B: The Basics

For more information, explore MedicareMadeClear.com or contact the Medicare helpline 24 hours a day, seven days a week at 1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048.

Y0066_170118_132416 Accepted

Tags: