Part B Premium Is Going Up in 2016

The Medicare Part B premium is going up in 2016 – way up. But this increase will not affect everyone on Medicare.

The Part B premium is supposed to go up to $159.30 because of a complicated formula connected to what Medicare spends on Part B services. The current Part B premium is $104.90 and has not changed over the last three years.

Medicare Part B covers everything not covered by Part A. Part A covers hospitalization, home health care, skilled nursing facility charges, and hospice.

Who will not pay a higher Part B premium in 2016?

People collecting Social Security (70% of all Medicare beneficiaries) will not pay a higher premium because they will not get a Social Security increase in 2016. Medicare rules say if people don’t get a raise in their Social Security, they can’t be charged a higher Part B premium.

Who will pay a higher Part B premium in 2016?

**People who are new to Medicare in 2016 will get socked with a $159 bill for their Medicare instead of $104.90.

**People on Medicare who are not yet collecting Social Security will get hit with the higher premium. The full age for Social Security is 66, but many people take it earlier at a reduced amount.

If people who are near their “full retirement age” want to avoid the higher Part B premium, they need to start collecting Social Security by November of this year.

**People who earn more than $85,000 per year (single) or $170,000 (couple) already pay higher premiums. In 2016, their higher premium will be based on $159 and will go up from there on a sliding scale.

The Part B premium is based on a formula – not politics.

But such a huge increase – to be paid by about 7.5 million people – may lead to political outcry. Supposedly, the Department of Health and Human Services is looking at some way to get to a lower Part B premium. Money could possibly be taken from “reserves” to keep the Part B premium from being $159.

Medicare Part B is highly subsidized by taxpayers.

People on Medicare do not realize their Part B premium ($104.90 in 2015) covers only about 25% of the cost of Part B services. The other 75% comes out of the federal budget – and this is what all the fighting over Medicare is all about.

The info below shows (in copper color of the last two columns) that, in 2014,  73% of Part B funding came from general revenues while 74% of Part D funding came from general revenues.

Total Part B expenses were about $259.8 billion in 2014.

Total Part D expenses were $78.2 billion in 2014.

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For the full report on Medicare from the Kaiser Family Foundation, use this link:



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