What Does the Average American Pay for Medicare Part B?
If your yearly income in 2019 was $88,000 or less (for individuals) or $176,000 or less (for couples), you will pay the standard premium of $148.50. However, if you make more than this, you’ll kick in more every month for your insurance. Depending on your income, you may pay 35, 50, 65, 80 or 85 percent of the total cost of the premium. Here is what you can expect to pay each month if you fall outside the standard premium:
Why Do I Have to Pay More for Medicare?
Since 2007, higher-income beneficiaries must pay more for Medicare Part B medical insurance. This is referred to as the Income-related Monthly Adjustment Amount or IRMAA. If you receive a letter from Social Security saying that you met IRMAA, you’ll have to pay more for Part B.
Additionally, you may also have to pay more for Part D or prescription drug coverage. The 2021 amounts range from $12.30 to $77.10. Keep in mind that Social Security looks at the tax return from two years prior.
What if I’m Paying More Needlessly?
While no one enjoys paying more for Medicare, the flip side is that you’re generating more income than the average American. However, there are some cases where you might be paying more than you need to. For example, a life-changing event can significantly decrease your income and affect the premium you have to pay for medical insurance.
Examples of life-changing events are:
- Death of spouse
- Work reduction
- Work stoppage
- Loss of income-producing property
- Loss or reduction of pension income
If any of these events occur and reduces your income, file a notice with the Social Security Administration to seek a reduction in Part B insurance. If you have additional questions regarding Medicare and Part B premiums, contact Leonard Financial Solutions today.