There’s both good news and bad news for individuals who will be paying Medicare Part B premiums in 2016.
Good news: The basic monthly Medicare Part B premium remains at $104.90 in 2016 (the same as it was 2015). The premium amount is based on cost-of-living adjustments (COLAs) for Social Security recipients. Because there’s no COLA for Social Security recipients in 2016, the premium amount stays the same. The monthly cost is only slightly higher, $121.80, for those enrolling in 2016.
Bad news: Certain individuals must pay higher monthly Medicare Part B premiums based on their modified adjusted gross income (MAGI). Also, senior citizens in the same income categories owe a surcharge on Part D premiums for coverage of prescription drugs.
The monthly rates for single and joint filers in 2016 are shown in the chart.
The Social Security Administration (SSA) uses the tax figures from two years ago to determine the Part B premiums and Part D surcharges. Thus, the MAGI reported on a taxpayer’s 2014 tax return determines whether the taxpayer must pay a higher monthly Part B premium in 2016 and a Part D surcharge. For example, a single filer with a MAGI of $150,000 in 2014 will have to pay a monthly Medicare Part B premium of $243.50 in 2016 and a monthly Part D surcharge of $32.80.
Note that the Affordable Care Act (ACA) suspends indexing of the income brackets for Medicare Part B premiums until 2020.
Tip: Other special rules apply to married couples who file separate returns. For more information, visit www.ssa.gov.
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