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3 Tiers for Medicare in 2011

76, 14 Jan 2011

THREE TIERS FOR MEDICARE IN 2011
Most Medicare beneficiaries won’t see any increase in Medicare Part B premiums in 2011. This is because there was no cost-of-living adjustment (COLA) for Social Security annuitants this year. Beneficiaries with incomes under $85,000 (or $170,000 for couples) and who have their Part B premiums withheld from their Social Security will have their premiums frozen at either $96.40 or $110.50 per month (depending on when they signed up). For others, Medicare Part B monthly premiums will be $115.40 in 2011 – a 4.4 percent increase over the 2010 premium. This increased premium will affect:

* New Part B beneficiaries (because they didn’t have the premium withheld from their Social Security benefit in the previous year) and,

* Beneficiaries who do not have their Part B premium withheld from their Social Security benefit.

As experienced in January 2010, beneficiaries with incomes above the levels cited in the second paragraph of this article also will see higher premiums in 2011, based on the income they reported to the IRS for 2009. At incomes above those levels, the government subsidy for Medicare is progressively reduced.

For most eligibles, the subsidy is 75 percent. As income rises, the subsidy is progressively reduced – to 20 percent for those in the highest income category (see chart).

2011 Medicare Part B Premiums

 

Individual Income

Eligible Before 2010

2010 Eligibles

New 2010 Eligibles

Gov't Subsidy

Under $85K

$96

$111

$115

75%

$85+K - $107K

$162

$162

$162

65%

$107+K - $160K

$231

$231

$231

50%

$160+K - $213K

$300

$300

$300

35%

Above $213K

$369

$369

$369

20%

 


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