The law requires an increase to your monthly Medicare Part B & D premiums if you have “higher Income”. The higher your income, the more you pay. Most people do not pay the higher premium but we want you to be aware that this might happen if you sell a home or stocks with large capital gains or take large distributions from your IRA accounts because it will increase your AGI. Your 2017 Medicare premium will be based on your Adjustable Gross Income (AGI) from your 2015 tax return. Each year the premium is re-evaluated based on your taxes. If you have a large windfall in one year you will only have to pay the increase for one year and then the premium will go back down.
The following is a table that shows the income amounts that were used in 2016:
The Social Security cost of living increase and Medicare premium increase have not been announced yet but is expected to be less than 1%. The open enrollment period to change your Medicare plan is from October 15-December 7.
It is also that time of year for Open Enrollment if you are employed with benefits. Make sure you review all the benefit options you have and choose what is right for you. Take advantage of Flexible Savings accounts for healthcare or childcare. Has your income increased – did you also increase your 401K contributions?
Note: You can dispute the increase if your income has decreased substantially. The number one reason is due to death of spouse or divorce. The Medicare website has a list of what reasons are acceptable and what you need to do to dispute the increase.