The following two charts illustrate the current state and possible future of Medicare Part B premiums. The $170.50 premium is equal to 35%, the $243.60 to the 50% rate, etc. These earnings amounts are not indexed so more people will be affected in a few years.
Keep in mind that none of the premiums are real for 2016. They are being managed by the hold harmless provision under Social Security and by the budget act Congress used to mitigate the tremendous cost shifting that would have occurred in 2016 for those paying supplemental premiums.
The Bipartisan Budget Act is still in effect for 2017. Should there be a very small or no COLA (likely), the BBA will again modify the premiums you see in the second table. But sooner or later the day of recoding will come and those being held hold harmless will play catch up. See Note 5 below. The potential exists for those held harmless and paying $104.90 in premium to jump to $121.80 if there is a sufficient COLA.
Confused? Don’t feel bad. It’s a mess and will likely get worse as Congress continues to manipulate the system and push off the day of reconing. The costs are still the costs which have to be paid by someone some how.
Following are the estimated standard Medicare Part B premium for those not subject to the Social Security hold harmless provision or the high income premiums if there were no adjustments by the Budget Act that held down premiums in 2016.
NOTE 5 If the Social Security COLA were 0 percent (so that the BBA provisions would apply) or large enough to allow all Part B enrollees to pay the full 2017 premium, then the estimated 2017 premium would be roughly the same as the 2016 premium of $121.80. This amount includes the increase in premium to repay the general fund under the BBA, as the margin included in the 2016 Part B financing is projected to be adequate to absorb most of the additional repayment.