Why Would I Have to Pay More Than $134 in Medicare Part B Premiums?

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By on January 25, 2017 in Q&A, Retirement with 0 Comments

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Q: I was told by a colleague of mine that she has to pay more than the $134 Medicare Part B premium. Why is this so?

A: Medicare has what they call an Income Related Monthly Adjustment Amount (IRMAA) that individuals whose modified adjusted gross income (MAGI) is above a certain amount are required to pay for Medicare Part B. MAGI, with few exceptions, is your adjusted gross income (from your tax return) plus any tax-exempt interest income you may have received.

Congress was clear about the purpose of IRMAA, when it was introduced in 2007; that purpose was “to reduce the federal subsidy” for Medicare Part B for higher income Medicare beneficiaries. The table below shows the monthly Medicare Part B premiums for 2017.

Single filing status Joint filing status Premium
Less than $85,000 Less than $170,000 $134
Between $85,000 and $107,000 Between $170,000 and $214,000 $187.50
Between $107,000 and $160,000 Between $214,000 and $320,000 $267.90
Between $160,000 and $214,000 Between $320,000 and $428,000 $348.30
Over $214,000 Over $428,000 $428.60

The dollar amounts were initially indexed for inflation, but the indexing was frozen for five years in 2010 to help fund Obamacare. After five years were up, Congress froze it again just for general principles.

As of the time of this response, Congress is talking about modifying (reducing) the Part B premium for those with MAGIs below $85,000 (single) and $170,000 (joint).

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John Grobe is President of Federal Career Experts, a firm that provides pre-retirement training and seminars to a wide variety of federal agencies. FCE’s instructors are all retired federal retirement specialists who educate class participants on the ins and outs of federal retirement and benefits; there is never an attempt to influence participants to invest a certain way, or to purchase any financial products. John and FCE specialize in retirement for special category employees, such as law enforcement officers.