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Why Does A Person With $19,000 In Income Pay The Same Medicare Premium As Someone With An Income Of $85,000?
Why does a person having a income of 19,000 pay same part p premium as someone having income of 85,000
Hi,
I assume that you're referring to Part B of Medicare, which covers outpatient care. Until 2007, everyone paid the same premium amount for Part B of Medicare. However, the standard premium only pays for approximately 25% of the cost of the coverage with the other 75% being subsidized by the government. Congress passed a law in 2003 (which became effective in 2007) requiring people with higher incomes to pay a higher percentage of the cost of their Part B coverage. Congress established different income tiers to determine the percentage charged and the maximum income that an individual can have and still pay the standard premium was set at $85,000 (https://secure.ssa.gov/poms.nsf/lnx/0601101020). I don't know why they chose that amount, though.
Best, Jerry