Medicare Premiums For Upcoming Year

The Centers for Medicare & Medicaid Services (CMS) has announced the new supplemental Part B and prescription drug Part D premiums for calendar year 2019, which are detailed in the tables below.  The 2019 standard Part B premium has increased to $135.50/month on average (or higher, depending on your income, from $134/month in 2018).

Due to a provision in the Social Security Act called the “hold harmless” rule, Medicare premiums for existing beneficiaries can’t increase faster than their Social Security benefits. Social Security benefits are receiving a 2.8% cost-of-living increase for 2019.  This increase will cause more people to pay higher monthly Medicare Part B premiums closer to the standard ($135.50) amount. The Social Security Administration (SSA) provides enrollees with the exact Part B premium for 2019.

Approximately 30% of Medicare beneficiaries are not protected by the hold harmless rule, and may pay the standard premium or more for Medicare Part B. You fall into this group if:

  • You enroll in Part B for the first time in 2018.
  • You don’t get Social Security benefits.
  • You’re directly billed for your Part B premiums (they aren’t taken out of your Social Security benefits).
  • You have Medicare and Medicaid, and Medicaid pays your premiums.
  • Your modified adjusted gross income, as reported on your federal income tax return from two years ago, is above a certain amount.

While premiums across the board have received an incremental increase, new for 2019 is a sixth premium tier for higher income households.  These premium tiers (above the standard premium) are referred to as Income Related Monthly Adjustment Amount (IRMAA).  Beneficiaries with higher incomes have been subject to IRMAA since 2007.  To determine if you’re subject to IRMAA, the Social Security Administration uses the most recent federal tax return provided by the IRS. Generally, the 2017 tax return you filed in 2018 (based on 2017 income) will be used to determine if you will pay an IRMAA premium in 2019.

Since 2000, standard Part B premiums have increased nearly 6% per year.  Over the same timeframe the Social Security cost of living adjustment has been slightly above 2%.

You can contact the Social Security Administration if you have new income information to report that might change or lower your premium (for example, you lost your job/retired and your income has gone down, or you’ve filed an amended income tax return).

If you have questions, please contact your JNBA Advisory Team, who you can also put you in touch with one of our Medicare professional resources.

2019 PART B:  If your filing status and yearly income in 2017 was: You pay each month (in 2019)
File individual tax return File joint tax return File married & separate tax return
$85,000 or less $170,000 or less $85,000 or less $135.50
above $85,000 up to $107,000 above $170,000 up to $214,000 Not applicable $189.60
above $107,000 up to $133,500 above $214,000 up to $267,000 Not applicable $270.90
above $133,500 up to $160,000 above $267,000 up to $320,000 Not applicable $352.20
above $160,000 and less than $500,000 above $320,000 and less than $750,000 above $85,000 and less than $415,000 $433.40
$500,000 or above $750,000 and above $415,000 and above $460.50

 

2019 PART D: If your filing status and yearly income in 2017 was:
File individual tax return File joint tax return File married & separate tax return You pay each month (in 2019)
$85,000 or less $170,000 or less $85,000 or less your plan premium
above $85,000 up to $107,000 above $170,000 up to $214,000 not applicable $12.40 + your plan premium
above $107,000 up to $133,500 above $214,000 up to $267,000 not applicable $31.90 + your plan premium
above $133,500 up to $160,000 above $267,000 up to $320,000 not applicable $51.40 + your plan premium
above $160,000 and less than $500,000 above $320,000 and less than $750,000 above $85,000 and less than $415,000 $70.90 + your plan premium
$500,000 or above $750,000 and above $415,000 and above $77.40 + your plan premium

Visit www.medicare.gov or www.ssa.gov for additional information.

Please see important disclosure information at www.jnba.com/disclosure