Medicare Part B Premiums For Individuals Earning Above $85,000 & Couples Earning Above $170,000

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In 2003, Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. One of the provisions of this law was that, beginning in 2007, enrollees who have a “higher income” would pay a higher Medicare Part B premium each month. Specifically, if an enrollee’s “modified adjusted gross income” (* See below for definition) is greater than the legislated threshold amounts ($85,000 in 2012 for an enrollee filing an individual income tax return or married enrollee filing separate tax return, and $170,000 for a couple, both of whom are enrollees, filing a joint tax return) the enrollee is responsible for a larger portion of the estimated total cost of Part B benefit coverage.

(* Modified adjusted gross income (MAGI) is the total of your adjusted gross income and tax-exempt interest income, if any. The amounts of these items are shown on lines 37 and 8b of IRS from 1040 (2011 version, for 2010 tax return.) Some examples of tax exempt interest are interest free state and municipal bonds and interest-exempt dividends from a mutual fund or other regulated investment company.

In addition to the standard Part B premium, affected beneficiaries must pay an income-related monthly adjustment amount. These income-related amounts were phased-in over three years, beginning in 2007. About 4 percent of current Part B enrollees are expected to be subject to these higher premium amounts.

The 2012 Part B monthly premium rates to be paid by beneficiaries who file an individual tax return (including those who are single, head of household, qualifying widow(er) with dependent child, or married filing separately who lived apart from their spouse for the entire taxable year), or who file a joint tax return are shown in the following table. There may be a late-enrollment penalty

Table 1: Part B Monthly Premium

If Your Yearly Income Is
Your 2012 Part B Monthly Premium Is Beneficiaries who file an individual tax return with income Beneficiaries who file a joint tax return with income
$99.90 $85,000 or less $170,000 or less
$139.90 $85,001-$107,000 $170,001-$214,000
$199.80 $107,001-$160,000 $214,001-$320,000
$259.70 $160,001-$214,000 $320,001-$428,000
$319.70 Above $214,000 Above $428,000

Table 2: Part B Monthly Premium Beneficiaries who are married, but file a separate tax return from their spouse and lived with his or her spouse at some time during the taxable year

Your 2012 Monthly Premium is Beneficiaries who are married but file a separate tax return from his or her spouse
$99.90 $85,000 or less
$259.70 $85,001-$129,000
$319.70 Above $129,000

If you are having trouble paying your premiums, Social Security recommends that you contact your State Medical Assistance (Medicaid) office to see if you qualify for some help. Some states refer to the Medicaid office as the Public Aid office, the Public Assistance office, or the State Medical Assistance office. Additional information about the Medicare premiums, deductibles, and coinsurance rates for 2012 is available at Medicare Premiums And Deductibles For 2012, released October 27, 2011.

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One Response to Medicare Part B Premiums For Individuals Earning Above $85,000 & Couples Earning Above $170,000

  1. Joe says:

    Sounds like a good thing, but I really got hit hard (double medicare premiums; and max tax rate) 2 years ago when I had to withdraw money from Roth IRA to pay mortgage (or let it go into default). Couldn’t convince IRS or Medicare otherwise.
    Thanks for the info…keep it up!!!

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