|Will Part B and Part D Premiums Increase in 2016?|
We will know in November, but it is “sort of” an election year!
When the president repealed and replaced the Sustainable Growth Rate (SGR) for physicians, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) also included raising Medicare Part B and D premiums for 2018 to help pay for the increase in physicians’ pay.
Based on projections from the Medicare Trust Fund, the increases will be for only two levels of modified adjust gross income plus tax-exempt interest:
A) $133,500 to $160,000 - Part B and Part D combined premium is estimated at $310 rather than before with the MACRA at $238. The increase is based on this group paying 65% rather than the current 50% of the Part B and D programs.
B) $160,000 to $214,000 - Will have a projected Part B and Part D combined estimated premium of $381 rather than before with the MACRA at $310. The increase is based on this group paying 80% rather than 65% of both the Part B and D programs.
Adjusted gross incomes up to $85,000 and over $214,000 are currently projected to stay the same, as their levels of paying for the Part B and D programs did not change: 25% and 80% respectively.
This is information that would also be helpful in financial planning for people 62 and older. The premiums for 2018 will be based on 2016 incomes. Any extra income or drawing from a retirement fund may cause a person to be in a higher bracket.
Moving from a higher income bracket to a lower one, may likewise lower the premiums. Should this occur during the year, Social Security may adjust the premium to a lower bracket rather than the last filed tax return. The Redetermination Form CMS 20027 would be used to request this reduction of a premium.
Increasing attention is being given to potentially high Part B premium increases for Medicare beneficiaries in 2016. Congressional action will need to be taken once the final recommendation is presented to them in October. Here’s what could happen, pending congressional action.