Medicare Rates for 2008

Maybe you have heard the news but, just in case:
“…The Centers for Medicare and Medicaid Services (CMS) has announced the new Medicare premiums, deductibles, and coinsurances. The standard Medicare Part B premium is increasing by 3.1 percent to $96.40 a month, the smallest increase since 2001…”
The increase is lower than previously expected in part due to the correction of an accounting error. Money for certain hospice benefits had been inadvertently drawn from the Part B trust fund rather than the fund that pays hospital costs. In addition, the lower premium assumes that physicians will take a 10 percent cut in their reimbursement rates. It is expected that Congress will act to offset some of or all of that pay cut, meaning that future-year premiums will reflect the additional expense.
Here are all the new Medicare figures:
· Part B premium: $96.40/month (was $93.50)
· Part B deductible: $135 (was $131)
· Part A deductible: $1,024 (was $992)
· Co-payment for hospital stay days 61-90: $256/day (was $248)
· Co-payment for hospital stay days 91 and beyond: $512/day (was $496)
· Skilled nursing facility co-payment, days 21-100: $128/day (was $124)
As directed by the 2003 Medicare law, for the first time, higher income beneficiaries will pay higher Part B premiums. But, for married couples your income must be over $102,000, so you want to make sure that if you take any capital gains that they don’t throw you over this threshold – there is a 2 year delay. In other words, if you made $102,000 in 2006 then you would have to pay a higher Medicare Premium of $122.20.
As income goes up, the numbers go up from there.

· I have only seen “unofficial amounts” for the social security Cost of Living Adjustment that will take place January 1, 2008 and at this time is estimated at a 2.2% increase. We will see.

Medicare Costs - 2007

In calculating the extra premiums for 2007, the government will generally use income data from tax returns for 2005. For a single person with income of $80,001 to $100,000, and for each member of a couple filing a joint return with combined income of $160,001 to $200,000, the surcharge will be $12.50 a month, and the total premium will be $106 a month.The surcharge rises with income. For an individual with income greater than $200,000 and for each member of a couple with combined income exceeding $400,000, the surcharge will be $68.60 a month in 2007, and the total premium will be $162.10 a month. The surcharge will be much higher in 2008 and later years.
As to "much higher", the Kiplinger Tax Letter advises that the '08 surcharge will be double those for '07 and and it will be triple for '09.
If a MFJ client gets pushed into the $160-200K range for one year in 2006, his surcharge for '08 would appear to be $25/mo. With AGI over $400K, the surcharge would be $137.20, but the incremental increase as a result of a $35K capital gain would be less than $40/mo.

Medicare Rates - 2006

Written September 2006:

Maybe you have seen this already, if not, for retirement planning purposes don't forget health insurance:

Medicare Part B premiums are increasing by 13.2 percent. The increase is due to increased use of Part B services. Here are all the new Medicare figures:

Part A deductible: $952 (was $912)
Part B premium: $88.50/month (was $78.20)
Part B deductible: $124 (was $110)
Co-payment for hospital stay days
61-90: $238/day (was $228)
Co-payment for hospital stay days 91 and beyond:
$476/day (was $456)
Skilled nursing facility co-payment, days 21-100:
$119/day (was $114)
Part C premiums are your "medi-gap" insurance policy
premiums, now called Medicare Advantage and vary
Part D premium: $32/month
(begins January 1, 2006) is for drug/prescription coverage

Also, the social security retirement cost of living increases for 2006 will be 4.1% and (not the typical 2-2.5%) and more than cover this $123.60 per year increase in the Part B premium (but, of-course, that does not include the premium increases on your other health insurance policies for the gaps in coverage).