Medicare Part B premiums in 2014

As announced by the Centers for Medicare and Medicaid Services (CMS) last October, the standard 2014 Medicare Part B premium remained unchanged from the 2013 amount of $104.90 per month. Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and other items. 

Not everyone pays the standard Medicare Part B (Medical) premium amount. Based on the amount of Federal tax return modified adjusted gross income (MAGI), some people pay a higher Part B premium. This affects less than five percent of people with Medicare, so most people do not pay a higher premium.

By law, the standard Part B premium represents roughly 25 percent of the coverage cost. In effect, most people enrolled in Medicare Part B actually receive a large subsidy, about 75 percent, of the coverage cost. People with higher income pay a larger proportion of the coverage cost.

The most recent Federal tax return available is used to determine the 2014 income adjusted Part B premium amount. This is generally, but not always, from a tax return filed in 2013 for tax year 2012. In several situations, changes can be made if income has gone down due to specific events including a change in marital status or work levels. 

The standard Medicare Part B (Medical) premium of $104.90 applies if an individual Federal tax return shows modified adjusted gross income (MAGI) of $85,000 or less and for a married couple a MAGI of $170,000 or less. Based on a sliding scale, there are several different premium amounts.

More information, including a chart showing 2014 premium levels, is in the booklet “Medicare Premiums: Rules for Higher Income Beneficiaries” available online at http://www.socialsecurity.gov/pubs/EN-05-10536.pdf.

General Medicare information, including an online application, is in the Medicare portion of the Social Security website, www.socialsecurity.gov  

 

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