Medicare Part B Premiums – Don’t Forget to do the Math

For many people, becoming eligible for Medicare provides a unique opportunity to finally save money on the expensive premiums one might be paying under their employer group plan.  If you are approaching the age of Medicare eligibility, reviewing the cost of Medicare Supplements or Medicare Advantage Plans available can be quite exciting.  A word of caution, however, make sure you check your Medicare Part B premium rates.

Many people talk about Medicare among their friends and hear that the premium is a little over $100.00 per month for Part B.  This is often the case, unless your income exceeds the thresholds for the base premium per the Social Security Administration.  If your modified adjusted gross income (MAGI) from the tax return filed two years previous exceeds $85,000 for an individual or $170,000 for married couples (see the brochure available from the social security administration Medicare Premiums: Rules for Higher Income Beneficiaries) you may be subject to an additional surcharge for both Medicare Part B and Medicare Part D.  If your income has gone done since the previous two years, the Social Security Administration will make adjustments to your information provided the change is verifiable.  In addition, they will revisit your premium surcharges on an annual basis and adjust them down if your income begins to decline, or adjust them up if they increase.

So do the math before you come of your employer group plan if you currently earn a lucrative income.  It may be more cost effective for you to wait until you retire.  Remember, if you are currently employed and covered under a creditable employer group plan, you can delay your enrollment with no penalties.