Although most Americans over the age of 65 will not see an increase in their Medicare Part B premiums in 2011 (along with a 0% cost of living adjustment to their Social Security retirement checks), retirees in several categories will pay more for Medicare Part B. The affected groups include seniors enrolling in Medicare for the first time, people who do not have Medicare premiums deducted from their Social Security retirement benefit, and higher income retirees.
According to the Social Security Online website, retirees who are married and file jointly and who have modified adjusted gross income (MAGI) over $170,000 will pay more for Medicare Part B premiums in 2011. Single filers with MAGI over $85,000 are also affected by this premium increase. Anyone affected by the Part B premium increase will also pay more for the Part D prescription drug benefit.
Avoid Higher Medicare Premiums
Fortunately, these premium increases may be avoidable with some careful planning. The trick to avoiding premium increases for Medicare Parts B and D lies with carefully controlling one's adjusted gross income (AGI). However, the necessary planning also requires a two-year timeline. The Social Security Administration will examine tax returns from 2009 when calculating Medicare premiums for 2011. Similarly, 2012 premiums will be influenced by income reported on 2010 tax returns.