High-Income Earners to See Hike in Medicare Costs

medicare premiums increase, woman looks concerned with dollar signs floating above

High-income earners could see a 200 percent increase in their Medicare prices in the coming months. Due to a recent change in income brackets for Medicare Part B and Part D, many beneficiaries will be bumped into a higher cost tier.

Premiums

In 2018, the premium for most Part B beneficiaries is $134. This is what you pay if your income is $85,000 or less for an individual, or $170,000 or less for couples. Couples with higher incomes will pay considerably more. For example, the 2018 Part B premium for individuals who earn more than $160,000 and couples who earn more than $320,000 is $428.60

The Bipartisan Budget Act of 2018 (reported on here) dictates another change to Medicare in 2019: individuals earning more than $500,000 and couples earnings more than $750,000 will move out of the current top bracket and be responsible for 85% of the cost of their Part B and Part D benefits, which is up from the current 80%. To put this into perspective, those in the lowest cost tier pay 25% of the cost of benefits.

MAGI

How much you’re paying for your 2018 premium is based on your 2016 Modified Adjusted Gross Income (MAGI). See the chart below for a breakdown of the current cost tiers.

chart of modified adjusted gross income

Appealing

If you believe you are paying too much for your premiums based on your income, you have the right to request that the Social Security Administration reduce or eliminate your premium increase. You can do this by visiting your local Social Security office, or calling 1-800-772-1213 (TTY 1-800-325-0778).

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