Minor question about IRMAA rates

[SecondCor521]

Hi all,

I know generally about IRMAA.

From googling, I read that the income brackets for IRMAA will be adjusted for inflation.

From googling, I see that the rates charged each year go up by some amount.

Although IRMAA starts to be a consideration around age 63, at the moment I'm just interested in trying to assess it's impact on my post-70.5 taxes.

I've already programmed in the current rates and brackets, and inflated the brackets by inflation.

What would you suggest as a rate by which the premiums themselves go up?

So for example, the 2018 standard premium was $134; in 2019 this number went to $135.50, an increase of $1.50. How much does that premium number go up on a long-term historical basis?

 

[gromit]

The attached article includes a chart of Medicare B costs from the 60s forward.
"Over 51 years, the compounded annual increase in premium cost is roughly 7.7%..."



https://www.fool.com/retirement/2017/02/05/heres-what-51-years-of-medicare-part-b-premium-inc.aspx

 

[SecondCor521]

The attached article includes a chart of Medicare B costs from the 60s forward.
"Over 51 years, the compounded annual increase in premium cost is roughly 7.7%..."

https://www.fool.com/retirement/2017/02/05/heres-what-51-years-of-medicare-part-b-premium-inc.aspx

Thanks!

Right now the IRMAA impact isn't that big according to my spreadsheet, but adding in a 7.7% annual increase will obviously make it worse.

 

[SecondCor521]

It made it worse. The IRMAA premium for me amounts to about a 4.57% adder to my marginal rate at age 70.

 

[MissMolly]

The standard Part B premium is expected to increase $9 a month and the Part B deductible is expected to increase from the current $185 to be $197 in 2020.

https://www.medicareresources.org/faqs/how-much-does-medicare-part-b-cost-the-insured/

 

[SecondCor521]

The standard Part B premium is expected to increase $9 a month and the Part B deductible is expected to increase from the current $185 to be $197 in 2020.

https://www.medicareresources.org/faqs/how-much-does-medicare-part-b-cost-the-insured/

Thanks! I'm only 50, so I'm trying to project 20 years of increases.

 

[MichaelB]

Thanks! I'm only 50, so I'm trying to project 20 years of increases.

Many more years than that, if you're lucky.

Medicare is heavily subsidized. One scenario I keep in mind is the erosion of that subsidy. In addition to health care inflation, subsidy removal would increase the cost by 3x (not counting IRMAA). While I don't think that is a high probability scenario, I do think it's realistic to figure some decrease in subsidy over the long term.

 

[SecondCor521]

Many more years than that, if you're lucky.

Medicare is heavily subsidized. One scenario I keep in mind is the erosion of that subsidy. In addition to health care inflation, subsidy removal would increase the cost by 3x (not counting IRMAA). While I don't think that is a high probability scenario, I do think it's realistic to figure some decrease in subsidy over the long term.

I do hope to live past 70, but right now what I'm mainly looking at is what my marginal tax rate will be at that age compared to what it is this year. My simplistic formula is to Roth convert up to that marginal-rate-at-70.

I have no idea what will happen to any subsidies.