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).

John Grobe’s latest book, The Answer Book on Your Federal Employee Benefits, has just been released by LRP Publications. Order your copy at shoplrp.com. Ask your human resources office to contact Federal Career Experts about pre-retirement training.

© 2017 John Grobe. All rights reserved. This article may not be reproduced without express written consent from John Grobe.

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About the Author

John Grobe is President of Federal Career Experts, a consulting firm that specializes in federal retirement and career transition issues. He is also affiliated with TSP Safety Net. John retired from federal service after 25 years of progressively more responsible human resources positions. He is the author of Understanding the Federal Retirement Systems and Career Transition: A Guide for Federal Employees, both published by the Federal Management Institute. Federal Career Experts provides pre-retirement seminars for a wide variety of federal agencies.

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