Kiplinger’s recent article, “What You'll Pay for Medicare Premiums in 2019,” reports that a few Medicare beneficiaries (about 3.5%) will pay somewhat less because the cost-of-living increase in their Social Security benefits isn’t big enough to cover the full premium increase. The “hold-harmless provision” keeps enrollees’ annual increases in Medicare premiums from rising above their cost-of-living increases in Social Security benefits, if their premiums are automatically deducted from their Social Security payments. Social Security benefits are increasing by 2.8% in 2019, which will cover the increase in premiums for most seniors.
Premium increases are also pretty slight for most higher-income beneficiaries. Who are they? Those with adjusted gross income plus tax-exempt interest income of more than $85,000, if single or $170,000, if married filing jointly. These people already pay a high-income surcharge. However, a new surcharge tier will apply in 2019 for people with the highest incomes. Thus, monthly premiums for higher-income beneficiaries will be between $189.60 to $460.50 per person, based on their income.
If your income is $85,001 to $107,000 (or $170,001 to $214,000 if filing jointly), your monthly premium will go from $187.50 to $189.60. Monthly premiums for singles with an income of $107,001 to $133,500 (joint filers with income of $214,001 to $267,000) will be $270.90 (that’s up from $267.90). Premiums for singles earning $133,501 to $160,000 ($267,001 to $320,000 for joint filers) will increase from $348.30 to $352.20.
If your income was greater than that, your monthly premium for 2018 was $428.60. In 2019, again, there’ll be an extra surcharge tier for people with the highest income. These high-income surcharges for 2019, are typically based on 2017 income. You can contest the surcharge, if you’ve had life-changing events that may have dropped your income since then. This includes retirement, divorce or the death of a spouse.
If your income is in the range of $160,001 to $499,999 ($320,001 to $749,999 for joint filers), you’ll pay $433.40 per month. Single filers with income of $500,000 or more ($750,000 or more for joint filers) will pay $460.50 per month.
Deductibles will also go up in 2019: the deductible for Medicare Part A, which covers hospital services, will increase from $1,340 in 2018 to $1,364 in 2019. The deductible for Medicare Part B, which covers physician services and other outpatient services, will see a small increase from $183 to $185.
One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security. Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.
Reference: Kiplinger (October 12, 2018) “What You'll Pay for Medicare Premiums in 2019”