Medicare Premiums rising for high-income beneficiaries

Higher-income people will have to pay higher Medicare premiums than other beneficiaries next year as the government takes a small but significant step to help the financially ailing program remain viable over the long term.

People with incomes over $80,000 or $160,000 for married couples will be expected to pay more. Supporters say it makes sense for the wealthy people to pay more at a time when Medicare costs are soaring. The premium in question is the Part B of Medicare. The surcharge will be phased in from 2007 to 2009.

The premium will be based upon your 2005 AGI (Adjusted Gross Income). For an individual the surcharges are as follows:

• $80,000 - $100,000 = 13.3%
• $100,000 - $150,000 = 33.3%
• $150,000 - $200,000 = 53.3%
• Over $200,000 = 73.3%

The surcharges for a married couple are as follows:

• $160,000 - $200,000 = 13.3%
• $200,000 - $300,000 = 33.3%
• $300,000 - $400,000 = 53.3%
• Over $400,000 = 73.3%

For 2008, the surcharge percentages will DOUBLE those shown in the previous tables and be based upon 2006 income. For 2009, the surcharge percentages will TRIPLE those shown above and will be based upon 2007 income. After 2007, the income levels will be adjusted for inflation.

Medicare recipients will receive a letter regarding this in mid November. Note that it comes out AFTER the elections.