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Questions And Answers About The Medicare Part B Premium
What is the Medicare Part B premium?
The Part B premium is the monthly amount paid by individuals for health coverage in Medicare Part B - a voluntary program that covers physician services, hospital outpatient care, durable medical equipment and other services including some home health care. The vast majority (about 93 percent) of Medicare beneficiaries are enrolled in Part B. Most individuals have the premium for their Part B coverage deducted from their Social Security, Railroad Retirement, or Federal government retirement checks.
How much is the Medicare Part B premium?
The 2011 standard premium for Medicare Part B health coverage is $115.40. However, most beneficiaries will continue to pay $96.40 per month, the same amount they paid in 2009 and 2010, due to a provision in law which prevents an increase in the Part B premium that would be more than the Social Security cost-of-living (COLA) increase. Most beneficiaries who were paying $110.50 in 2010 will pay this amount for their Part B premium in 2011.
Beneficiaries who file an individual tax return with income |
Beneficiaries who file a joint tax return with income |
Total monthly premium amount |
Less than or equal to $85,000 |
Less than or equal to $170,000 |
$115.40, although most beneficiaries will |
Greater than $85,000 and less than |
Greater than $170,000 and less than |
$161.50 |
Greater than $107,000 and less than |
Greater than $214,000 and less than |
$230.70 |
Greater than $160,000 and less than |
Greater than $320,000 and less than |
$299.90 |
Greater than $214,000 |
Greater than $428,000 |
$369.10 |
What determines the amount of the Part B premium?
The standard Medicare Part B premium is determined by a formula contained in the 1997 Balanced Budget Act, which set the premium at 25 percent of total program costs. The remaining 75 percent of program costs are financed through general revenues. The Medicare Modernization Act of 2003 (MMA) requires higher-income beneficiaries to pay a higher percentage of program costs, resulting in multiple tiers of premiums based on income.
Why does the Medicare Part B premium increase every year?
Part B premiums have increased over the years because the premium formula is tied to the rising cost of health care. However, to provide a basic level of protection from rapidly accelerating health care costs, a "hold harmless" provision in the Social Security Act mandates that the Part B premium increase not exceed any beneficiary's cost-of-living adjustment (COLA) in their Social Security check. As a result, the net amount of the individual's Social Security check does not decrease. Because there was no COLA in 2010 and 2011, the Part B premium for most people remains at $96.40 per month. For those who enroll in Part B in 2011 or who do not have their premiums withheld from their Social Security checks, the standard premium is $115.40 per month.
The National Committee is a nonprofit, nonpartisan organization that acts in the interests of its membership through advocacy, education, services, grassroots efforts and the leadership of the board of directors and professional staff. The work of the National Committee is directed toward developing a secure retirement for all Americans.