The Medicare Part B premium took a rise in 2016 for many, including those new to Medicare.

Here’s a quick overview on how all this is structured:

By law, any higher costs to the Medicare system must be paid by beneficiaries. However, there is a clause in the law saying if there is no Cost of Living Adjustment (COLA) for Social Security recipients, they can be held-harmless to these increased costs. Those who are not held-harmless are those who have higher incomes ($85,000 individual or $170,000 joint tax return) and will pay additional premium over the base rate. Also, those who are new to Medicare for the following year may also not be held-harmless.

So what does this look like?

Approximately 70% of Medicare beneficiaries will fall under the held-harmless clause, which means their monthly Medicare Part B premium will remain $104.90 through 2016.

However, higher income individuals and many beneficiaries new to Medicare in 2016 will pay off the new base rate of $159.30 (see illustration below)

Proposed-Medicare-Part-B-Thresholds

Currently, there is talk of CMS trying to make adjustments to avoid a large spike in the Medicare Part B premium, but as of this writing, there is no final resolution.

We will update you as final resolutions are put into place.