Consolidated 2016 Medicare Part B Increase thread

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The Wizard
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Re: Consolidated 2016 Medicare Part B Increase thread

Post by The Wizard » Tue Nov 03, 2015 8:46 am

tadamsmar wrote:This is a good article on the increase, very detailed, see the table at the bottom that lays out next year's increase down to the penny:

http://www.fedsmith.com/2015/11/01/who- ... -premiums/

The impact in future years is a bit vague, surcharges (only $3,or more?) continue until the shortfall is made up, an estimated 5 years. Even the hold harmless crowd will see a $3 surcharge tacked on when they get COLAs, but I guess their benefit will never decrease in nominal dollars.
It's a good article since it shows Medicare premiums for higher income Medicare recipients as well.
As regards surcharges, etc, this situation will continue year to year so long as increases in healthcare expenses outpace the percentage increases in the cost of living metric used for annual SS COLAs, which is to say FOREVER under the current system.
I'll be paying $321/mo for Medicare next year and can look forward to that increasing to $500/mo and more if nothing legislative is done.
:(
Attempted new signature...

Independent
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Re: Consolidated 2016 Medicare Part B Increase thread

Post by Independent » Tue Nov 03, 2015 10:10 am

The Wizard wrote: As regards surcharges, etc, this situation will continue year to year so long as increases in healthcare expenses outpace the percentage increases in the cost of living metric used for annual SS COLAs, which is to say FOREVER under the current system.
That's not how I understand the math.

Suppose I have a $1,200/mo Social Security benefit, and I'm paying $104.90 in Medicare Part B premiums this year, with the premium deducted from my SS payment.

Maybe next year the CPI-W goes up by 2.0%. That's a $24/mo increase in my SS benefit, so there is room to increase my Medicare premium all the way up to $128.90. That's a 22.9% increase in my Medicare premium.

So, with only 2% CPI growth, the premiums for people who are protected this year due to the "can't decrease net monthly benefit" rule will rapidly close in on the premiums of people who aren't protected. A couple years of modest CPI growth and we'll be back to both groups paying the same premium.

Levett
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Re: Consolidated 2016 Medicare Part B Increase thread

Post by Levett » Tue Nov 03, 2015 10:38 am

Wizard--

You might have a look at the comments section of the Fedsmith article.

Farokid has challenged the validity of the premium tables posted.

"The higher income premiums shown in the table are incorrect. The first tier ($170K to $214K) higher income premium would be $120.70 plus 35% of that amount plus a $3 or $4 extra. That comes to about $167. The tiers above that would be based on the $120.70 plus whatever the penalty tier is. The table used is from BEFORE the budget deal. It's not great, but better than what it would be. It really hits the fan in 2017 if there is no SS increase. The budget deal specifically prevents the HHS secretary from making a similar adjustment. We need higher inflation to avoid a gigantic increase for anyone who is not in the hold harmless group."

Lev

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1210sda
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Re: Consolidated 2016 Medicare Part B Increase thread

Post by 1210sda » Tue Nov 03, 2015 10:42 am

Someone is on Medicare but not yet receiving social security benefits in 2015.

They will begin to receive social security benefits on July 1, 2016.(at FRA)

Would they have to pay the $123.70 per month for Part B for the entire year, or just through June, 2016.??

1210

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Leif
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Re: Consolidated 2016 Medicare Part B Increase thread

Post by Leif » Tue Nov 03, 2015 11:22 am

The numbers above $170,000 married are much higher (FedSmith article) then what I recorded from an earlier estimate. There is a big incentive to try to keep MAGI below 170.
Last edited by Leif on Tue Nov 03, 2015 11:30 am, edited 1 time in total.

etarini
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Re: Consolidated 2016 Medicare Part B Increase thread

Post by etarini » Tue Nov 03, 2015 11:28 am

I've been trying to find final Part B premiums that include IRMAA surcharges. I, too, am not sure that fedmsith has it right. Here's what I found in a Baird article, which seems to have updated premiums, since some of the amounts that fedsmith posted are the same as the estimated ones the Trustees posted a month or two ago. The premium in the Baird article matches the ratios that each IRMAA level reflects, relative to the standard premium (assuming $120), i.e., 1.4x, 2.0x, 2.6x, and 3.2x, depending upon the IRMAA bracket. They're rounded to a whole number, and the calculation appears to have been done before adding the $3, though it says that it is not reflected in the amounts. I can't find any other source to corroborate Baird, though I keep googling. Still, they're probably closer than the fedsmith numbers.

http://content.rwbaird.com/RWB/Content/ ... tegies.pdf

Eric

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dcnut
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Re: Consolidated 2016 Medicare Part B Increase thread

Post by dcnut » Tue Nov 03, 2015 12:54 pm

tadamsmar wrote:This is a good article on the increase, very detailed, see the table at the bottom that lays out next year's increase down to the penny:

http://www.fedsmith.com/2015/11/01/who- ... -premiums/

The impact in future years is a bit vague, surcharges (only $3,or more?) continue until the shortfall is made up, an estimated 5 years. Even the hold harmless crowd will see a $3 surcharge tacked on when they get COLAs, but I guess their benefit will never decrease in nominal dollars.
Thank you for the link, but the monthly premiums for those paying IRMAA must be in error. For example, the table shows the monthly premium for those in the lowest IRMAA category to be $223 + $3 = $226. That implies a Part B IRMAA of $223 - $120.7 = $102.30. The current IRMAA for that category is only $42.00. What is going on?

Glenn

Levett
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Re: Consolidated 2016 Medicare Part B Increase thread

Post by Levett » Tue Nov 03, 2015 2:38 pm

etarini,

Thanks for the Baird link.

I guess we will see in the fullness of time. ;-)

Lev

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ObliviousInvestor
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Re: Consolidated 2016 Medicare Part B Increase thread

Post by ObliviousInvestor » Tue Nov 03, 2015 6:10 pm

sscritic has requested that I point out that the new law has changed the way in which IRMAA is calculated. It is no longer 35%, 50%, 65%, and 80% of four times the standard premium, but those percentages of four times the standard premium plus four times another number (which sscritic hasn’t been able to figure out).

Here's the relevant wording:
https://www.congress.gov/bill/114th-con ... B022A5733D
(c) Conforming Application Of High Income Adjustments To Increased Monthly Premium In Same Manner As For Regular Medicare Premiums.—Section 1839(i)(3)(A)(ii) of the Social Security Act (42 U.S.C. 1395r(i)(3)(A)(ii)) is amended—

(1) by striking “AMOUNT.—200 percent” and inserting the following: “AMOUNT.—

“(I) 200 percent”; and

(2) by striking the period at the end and inserting “; plus”; and

(3) by adding at the end the following new subclause:

“(II) 4 times the amount of the increase in the monthly premium under subsection (a)(6) for a month in the year.”.
Unfortunately I cannot personally be much help here, as the Social Security changes are keeping me pretty busy.
Mike Piper, author/blogger

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tadamsmar
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Re: Consolidated 2016 Medicare Part B Increase thread

Post by tadamsmar » Thu Nov 05, 2015 12:12 pm

ObliviousInvestor wrote:sscritic has requested that I point out that the new law has changed the way in which IRMAA is calculated. It is no longer 35%, 50%, 65%, and 80% of four times the standard premium, but those percentages of four times the standard premium plus four times another number (which sscritic hasn’t been able to figure out).
Reverse engineering the Fedsmith table, I get 56.38571 for the "another number". This does not include the $3 surcharge.

It amounts to a 51.8% increase for those above the lowest income bracket. That's probably the 52% increase that's been in the news for months. The higher brackets are just getting a 51.8% increase plus a $3 surcharge. I figure those news stories were rounding up to 52%. Basically, the new law just held the lowest bracket (mostly) harmless.

Now, if I can just solve dark matter...
Last edited by tadamsmar on Thu Nov 05, 2015 1:43 pm, edited 2 times in total.

sel007
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Re: Consolidated 2016 Medicare Part B Increase thread

Post by sel007 » Thu Nov 05, 2015 1:15 pm

All of this uncertainty and churn reminds me of one of my favorite Yoda quotes:

“Difficult to see. Always in motion is the future..” .... Yoda

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Leif
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Re: Consolidated 2016 Medicare Part B Increase thread

Post by Leif » Wed Nov 11, 2015 5:03 pm

2016 Medicare Part B premiums announced on medicare.gov. If you're already collecting SS you will be kept at $104.90 if your income is in the first bracket.

Image

https://www.medicare.gov/your-medicare- ... costs.html

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