RSS Feed
|
|
|
|
|||||||||||||||||||||||||
|
Wealthier seniors to be penalized by Medicare
Searching Senior Dear Searching, Starting in January, most Medicare beneficiaries will see their Part B premiums rise only $5 to $93.50 per month (a 5.6 percent increase). However, the news isn't as good for wealthier seniors. Here's what you should know. Medicare Surcharge For the first time in Medicare's 41-year history, higher-income seniors will pay a significantly higher Part B premium based on their in- c o m e level. Part B is the voluntary portion of Medicare that covers doctors' services, diagnostic test and outpatient care. The higher payments will affect about 1.5 million beneficiaries (out of 40 million Part B enrollees) with incomes of more than $80,000 individually, or $160,000 as a couple. Congress approved the new income based charges as part of the same 2003 law that created the new prescription drug benefit, but it has received little attention until now. Note: The new Medicare charges will not apply to the separate Part D premiums charged for prescription drug coverage. And it won't have any affect on the 7 million lowi n c o m e b e n e f i - c i a r i e s who have B premiums paid for by the government. Financial Troubles With the rising health care costs, a growing number of Medicare beneficiaries who are living longer and using more services, combined with a dwindling tax base to support the program, Medicare is facing a shaky financial future. According to Medicare officials, the added premium increases will save the program $20.8 billion over the next 10 years. However, some experts worry that the higher premiums will drive wealthier and healthier retirees out of the Medicare program (relying on private insurance instead) and leaving behind the sickest and poorest seniors, which will lead to higher costs for those who remain. Senior advocacy groups also argue that high-income beneficiaries have already paid more into Medicare during their working lives and shouldn't have to pay more now. Who Pays What? It's important to know that the new income-based Part B premium increases will be phased in over a three-year period, 2007 - 2009. The surcharge for 2007 will be computed by the Social Security Administration using 2005 tax returns obtained from the Internal Revenue Service. Here's how the premium increases and income levels breakdown: Individuals with incomes under $80,000, or $160,000 for married couples filing joint tax returns, will pay the standard Part B premium, which will be $93.50 per month in 2007. Individuals with annual incomes of $80,000 to $100,000 (couples $160,000 to $200,000), will pay $106 per month in 2007 for their Part B premium, which is a 13.3 percent increase over the standard premium. But by 2009, when the premium increases are fully phased in, the surcharge will be 40 percent over the standard premium amount. Individuals with incomes of $100,000 to $150,000 ($200,000 to $300,000 for couples) will pay $124.70 per month starting in January - a 33.3 percent increase. By 2009, beneficiaries will pay double the standard premium amount. Individuals with incomes of $150,000 to $200,000 (couples $300,000 to $400,000) will pay $143.40 in 2007 - a 53.3 percent increase. In 2009 it will increase to 2.6 times the standard premium. Individuals with incomes above $200,000 (couples over $400,000) will pay $162.10 -a 73.3 percent increase in 2007, jumping to 3.2 times the standard amount by 2009. Savvy Tips: The "Medicare and You 2007" handbook, which will be mailed to all beneficiaries in October, will explain the changes to Part B premiums. Also in November, the Social Security Administration will mail you a letter telling you what to expect.
Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit www.savvysenior.org.
|
for larger version       |
||||||||||||||||||||||||
)
