Medicare Costs Could Rise by More Than 200 Percent for These Retirees

A recent HealthView Services analysis found as of this year, there is a transition in the income brackets used to determine how much older Americans will pay for their Medicare Part B and Part D coverage, reports CNBC . The highest earners may wind up paying 200 percent higher premiums for Parts B and D compared to someone in the first bracket. Drivers of this trend include the Medicare Access and CHIP Reauthorization Act, which reduced the ranges for the third, fourth, and fifth income brackets, pushing some retirees into the next bracket and hiking their Medicare costs. This year, premiums for Medicare Part B are $134 monthly for singles with a modified adjusted gross income of $85,000 or less in 2016. Premiums start climbing outside of those income levels, while Part D beneficiaries also pay additional costs on top of their plan premiums if their 2016 modified adjusted gross income (MAGI) surpassed $85,000. Also affecting Medicare is the Bipartisan Budget Act of 2018, which mandates that beginning next year, individuals with incomes exceeding $500,000 will pay higher Medicare surcharges, which the Medicare Rights Center estimates will comprise 85 percent of their program costs, up from 80 percent under current statutes. Higher-income retirees can try to control Medicare premiums by planning out their income sources before applying for the program. For example, income from a Roth IRA and Roth 401(k) plan does not count toward one's MAGI, and will not raise Medicare premiums.