It's bad enough that the Social Security Administration is not expected to pay a cost of living adjustment for benefits next year. But high-income retirees will also have to bear the brunt of rising Medicare Part B premiums in 2016.
Here's why: Under current law, the Social Security Administration has to keep Medicare Part B premiums flat for about 70 percent of beneficiaries if it doesn't issue a cost of living adjustment. However, the administration also has to raise Part B premiums on the other 30 percent of beneficiaries to offset the costs of Medicare Part B premiums foregone. (Medicare Part B covers services and supplies deemed medically necessary for seniors.)
Boston College's Center for Retirement Research estimates that most Medicare beneficiaries will pay $104.90 per month for Part B coverage next year while other beneficiaries will have to pay at least $159.30 per month for the same coverage, a 52 percent difference. Wealthier retirees are expected to pay even more. For them, Medicare Part B premiums will range from $223 per month to $509.80 per month depending on their income.
(See chart below.)