The Price of Health: Medicare Part B Premiums Now Tied to Income
Beginning in January, seniors whose income is greater than $80,000 if they're single and $160,000 if they're married will pay a higher premium for Part B of their Medicare coverage, the federal health insurance program for people 65 or older.
Medicare Part B covers physician and outpatient hospital services, some home health services, and medical equipment. In 2007, most beneficiaries will pay $93.50 per month, a $5 increase over the current year's premium. But seniors whose modified adjusted gross income is between $80,001 and $100,000 if single and between $160,001 and $200,000 if married will pay $105.80 per month. Those with incomes up to $150,000 if single and $300,000 if married will pay $124.40, and those whose incomes are up to $200,000 if single and $400,000 if married will pay $142.90. Finally, at the top end, single seniors with incomes over $200,000 and married couples with incomes over $400,000 will pay $161.40 per month for their Medicare Part B premium.
Until now, the federal government has paid 75 percent of the Medicare premium, and beneficiaries have been responsible for 25 percent, regardless of income. Congress changed the rules to require those with more resources to pick up a greater share of the tab. Not everyone is pleased with the change. "Medicare's success derives from its universality," says a position paper posted on the website for the Medicare Rights Center. "People with higher incomes already pay more in taxes for public programs, including Medicare."
The Social Security Administration will decide whether seniors must pay a higher premium based on the beneficiary's 2005 income tax return. The change will affect 1.6 million Medicare beneficiaries, about 4 percent of the total. Those who face increases should receive notices this week or next, says Jeff Nelligan, a spokesperson for the Centers for Medicare and Medicaid Services. For more information, seniors can call the SSA at 800-772-1213.