The Centers for Medicare & Medicaid Services has announced Medicare Part B premiums for 2018, and the base premium stays the same as this year at $134 a month, but a lot actually changes. For 70% of Social Security recipients who have been paying an artificially low $109 a month, they’ll see a big jump to the $134 a month level. Also, many high earners—starting at $133,500 for a single--will face higher high-income surcharges. Part B (the base and the surcharge) covers doctors’ and outpatient services.
The backdrop to the premium jump for the 70% of folks is that the Social Security Administration announced a 2% cost of living adjustment (COLA) for 2018 last month. The average benefit for a retired worker will rise by $27 a month to $1,404 in 2018. Many recipients will find most or all of their increase eaten up by the jump in the Medicare Part B premiums deducted from their monthly Social Security checks. A “hold harmless” provision (no increase in Medicare premiums can reduce a Social Security recipient’s net monthly check) kept their premiums in check before.
For folks who face high-income surcharges that are tacked on to Part B premiums, it’s a different story. They’re facing hikes for 2018 because of a 2015 Congressional budget deal, which compressed tax brackets, which forces more people to pay higher surcharges.
The graduated high-income premium surcharges for seniors kick in for singles with a modified adjusted gross income of more than $85,000 and for couples with a MAGI of more than $170,000. An individual earning more than $85,000, but less than or equal to $107,000, will pay $187.50 in total a month in 2018, including a $53.50 surcharge, the same as in 2017.
The next bracket is compressed, so individuals making $133,500 to $160,000 will now face a $214.30 monthly surcharge, up from $133.90, bringing their total premium up from $267.90 a month to $348.30 a month. That’s a 60% hike. Click here to continue reading.
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