Premiums for Medicare Part B will rise by a modest amount in the new year.
The average premium for Part B, which covers physician services, outpatient hospital services and medical equipment, will rise to approximately $109.00 for most retirees, according to an announcement from the Centers for Medicare & Medicaid Services.
That’s just slightly more than the typical premium of $104.90, which has been in place for the last four years.
Medicare’s premiums didn’t rise by much because they’re tied to Social Security’s cost-of-living adjustment for benefits in 2017. The Social Security Administration announced a 0.3 percent increase in benefits in October.
A “hold harmless” rule protects about 70 percent of recipients from large Medicare premium hikes during years in which the Social Security COLA is low. Those individuals, on average, will be paying $109.00 each month for their Part B coverage in January.
Premiums are higher for a few
The remaining 30 percent of older Americans, however, are not covered by this provision and will face higher costs.
For those people, they will be paying a standard monthly premium of $134.00 for 2017, up from $121.80 in 2016.
You can expect to pay these higher Part B costs in the following situations:
- You’re eligible to enroll in Medicare for the first time in 2017.
- You’re enrolled in Medicare, but you’re not collecting Social Security.
- You’re already subject to Medicare premium surcharges because you didn’t enroll on time and you pay a penalty.
Because Part B is means-tested, those who report higher income on their federal tax returns can expect to pay more for coverage. Your income can decline in retirement for a number of reasons, so you will have to contact Social Security for a reassessment of your premiums if that’s the case.
See below for a breakdown of what your premiums will look like next year if you’re a high-income beneficiary: