The Medicare Part B premiums retirees’ pay to the federal government is based on their income. If it’s above a certain amount, they’ll pay an adjusted amount. For 2016, most people who get Social Security benefits will continue to pay $104.90 each for their Medicare Part B premiums at the following income levels:

• individuals with an annual income of $85,000 or less
• married couples filing jointly with a combined annual income of $170,000 or less
• some Medicare members will pay $121.80 at the incomes shown above.

For other incomes, click here: Learn more about Part B premiums and adjustments.

*These amounts may change for 2017, based on adjustments made by the federal government.

Available through private health care organizations such as Kaiser Permanente, Medicare Part D helps pay for outpatient prescription drugs.

People with higher incomes may pay a higher premium for Part D. This premium adjustment is set by federal law. This premium is in addition to the higher Part B premium that people with higher incomes may pay.

Retirees with limited income may qualify for the low-income subsidy program.

The following table contains additional information on Part B and D premiums and their monthly adjustments. Note: Premiums can change annually.

Individuals

Married couples filing jointly

Married couples filing separately

* Adjusted gross income as reported on 2015 tax return.

¹ $104.90 for most people who get Social Security benefits. $121.80 for those who don’t get Social Security benefits, who enroll in Part B for the first time in 2016, and who are billed directly for Part B premiums. See Medicare.gov for complete details.

*These amounts may change for 2017, based on adjustments made by the federal government.

Learn more about Part B and Part premiums and adjustments

• If a health plan’s prescription drug coverage is as good as or better than Part D, it’s considered “creditable.”
• Employers who offer prescription drug coverage to Medicare-eligible individuals are required to notify their beneficiaries and the Centers for Medicare & Medicaid Services (CMS) whether or not their coverage is creditable.

Learn more about creditable coverage

Financial assistance for Medicare prescription drug coverage is offered to qualified beneficiaries who have limited income and resources. Based on their level of low-income subsidy qualifications, beneficiaries may have their:

• Part D prescription drug cost sharing either reduced or eliminated entirely (reduction will take place at the point of service)
• Medicare health plan premium reduced or eliminated entirely

The LIS amounts can change annually, even though the beneficiary’s LIS status doesn’t change. Your employees/retirees can apply for the LIS through either the Social Security Administration or the state’s Medicaid program office.

Learn more about your role in administering LIS  

Medicare Secondary Payer (MSP) is a term used when another payer (for example, a group health plan or workers’ compensation coverage) must pay for services provided to a Medicare beneficiary before Medicare pays.

• When Medicare is the secondary payer, it only pays after the member’s primary payment source has been exhausted or if a primary payment source doesn’t exist.
• The private insurance industry uses the term “coordination of benefits” when assigning responsibility for first and second payers.

CMS has mandatory reporting requirements for group plans like yours. Kaiser Permanente sends yearly communication requests to employers with Medicare retiree group coverage. The information you provide is given to the Centers for Medicare & Medicaid Services (CMS). This allows Kaiser Permanente to help you meet your legal obligations.

Learn more about your mandatory reporting requirements.

Retirees collecting Social Security benefits will be automatically enrolled in Medicare Parts A and B. If they’re not collecting Social Security and they choose to enroll in Part B, they should sign up during the initial enrollment period.

If a retiree doesn’t sign up during their enrollment periods, we notify the Centers for Medicare & Medicaid Services (CMS), which calculates any late penalties. If retirees disagree, they can appeal to the Social Security Administration.

Retirees who miss their Medicare deadlines could pay ongoing monthly late fees for as long as they have Medicare.

• Employees retiring at age 65--should sign up for Part B during their initial enrollment period — the seven-month stretch from age 64 years and 9 months to 65 years and 3 months.
• Late retirees--should sign up for Part B during an eight-month special enrollment period that begins either when they retire or the month coverage from an employer ends.
• Both employees retiring at 65 and late retirees--should enroll in Part D if they don’t have creditable prescription drug coverage for any continuous period of 63 days or more.
• If employees continue to work past retirement age--they may not have to enroll in Medicare if they have group health coverage through an employer or union.

• Part B: 10% multiplied by each full 12-month period the beneficiary delays enrollment.
• Part D: 1% multiplied by the number of full months without creditable coverage, then multiplied by the national base beneficiary premium.
• Both penalties are assessed monthly for as long as the beneficiary has Part B and/or D coverage.

Learn about late enrollment penalty calculation and more.