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Questions & Answers

Q:  Two people I know have two different Medicare Part B premiums.  One pays the new premium of $93.50, the other $ 79.00, and I pay $93.50.  The one with $79.00 has been paying this amount for the last two years.  Can you tell me why? — M.

A:  Your acquaintance who pays $79 per month for the Part B likely has an extremely low Social Security benefit.  If so, in recent years the increase in the Medicare Part B premium exceeded that individual's Cost-Of-Living Adjustment (COLA). 

A little-known provision of law protects benefits of most people who have their Part B premiums automatically deducted from their monthly Social Security payment.  The Part B premium increase may not exceed the amount of their COLA.  When it does, the federal government reduces the amount of the Part B premium to prevent a reduction in benefits.  The federal government appears to have adjusted the Medicare premium your acquaintance pays to prevent such a reduction. 

Your acquaintance receives enormously valuable savings this way on Part B premiums due to this benefit protection.  On the other hand, because the Part B premium requires all of that person's COLA, his or her net Social Security benefit, the amount after deduction for the Medicare Part B premium, has stopped increasing.  Thus unless your acquaintance has other sources of retirement income, he or she may be having quite a struggle keeping up with all other rising costs.

Your can help by signing TSCL's Petition to Congress Opposing Means Testing for Medicare Premiums

Seniors with incomes greater than $80,000 for the first time this year also pay different Part B premiums, depending on their incomes.  The provision of law that protects Social Security benefits from reduction does not apply to people who pay these higher "income-based" or Means Tested Part B premiums.  The following chart illustrates. 

2007 "Means Tested" Part B Premiums Income:*

Income:*

Individuals

Income:

Filing jointly

Monthly premium in 2007**

Under $80,000

Under $160,000

$93.50*

$80,000 - $100,00

$160,000 - $200,000

$106.00

 

$100,000 - $150,000

$200,000 - $300,000

$124.70

$150,000 - $200,000

$300,000 - $400,000

$143.40

Above $200,000

Above $400,000

$162.10

* The government uses modified adjusted gross income from 2005 tax returns

Source:  *Medicare Premiums and Deductibles for 2007, Centers for Medicare and Medicaid Services, September 12, 2006.

March 2007


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