Wealthy beneficiaries face up to 22% increase in Medicare Part B premiums

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The federal government's board of healthcare trustees published a report predicting wealthier beneficiaries of Medicare Part B — which covers physician visits and outpatient care — could face up to a 22 percent premium increase next year.

Wealthier beneficiaries will see the largest increases, as the Social Security Act's "hold harmless" provision prevents Medicare from initiating premium increases greater than Social Security's annual cost-of-living adjustment, which is currently about 0.2%, according to the Wall Street Journal. As 70 percent of Medicare beneficiaries qualify for hold harmless treatment, Medicare can only raise their premiums as much as the dollar increases in Social Security payments.

To combat this discrepancy, premium increases are distributed to the remaining 30 percent of beneficiaries who are not under hold harmless. If the board of trustees' predictions actualize, recipients under Medicare Part B who pay the standard $121.80 a month could see that rate increase to $149 a month, according to the trustees' estimations.

On the other end of the spectrum, in 2017 individuals earning between $85,001 and $107,000 and couples earning between $170,001 and $214,000 could see monthly payment increases from $170.50 per person to around $204.40. Higher still are increases for couples earning more than $214,000 or $428,000, with monthly premiums rising from $389.00 to around $467.20, according to WSJ.

In addition, all beneficiaries will see deductibles rise from $166 to $204 in 2017.

Social Security's cost-of-living adjustment will not be finalized until October, according to the WSJ. If it is higher than the board of trustees estimated, those who are not protected under hold harmless will see smaller premium hikes.

Fifty-five million individuals were covered on Medicare last year, 51 million under Part B. This number is set to increase in 2017 to 58.7 million total Medicare recipients and 53.5 million under Part B. 

 

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