Medicare refers to the U.S. federal government health insurance program for elderly and disabled citizens. Part B, specifically, is the medical insurance part of the program. Part A is hospital insurance, and most people pay no premiums for that. Part B, however, does require a premium. As of March 2015, the majority of Americans using Medicare paid a monthly premium of $104.90, but the rate consistently changes.
With the signature of President Lyndon B. Johnson on July 30, 1965, the Medicare program became federal law. President Johnson enrolled former President Harry S.Truman as the first official Medicare recipient. President Truman opted for Part B coverage. The initial monthly premium cost was $3. On July 1, 1966, more than 19 million Americans joined President Truman and enrolled in Medicare. The monthly premium for Part B coverage increased to $4 in April of 1968.
Part B premium rates are based on the projected cost to the federal government and Congress, an unpredictable factor. Historically, premiums go up each year. For example, Medicare Part B cost recipients $5.30 in 1970. By 1973, it was up to $6.30, though it was reduced to $5.80 in July and $6.10 in August that year. The premiums continued to increase and reached $31.90 per month in 1989. That rate came from the Medicare Catastrophic Coverage Act of 1988, a change that was intended to expand the program to cover some prescription medications and reduce out-of-pocket costs. It was repealed in 1989.
In 1990, monthly premiums were reduced to $28.60, only to increase in 1991 to $29.90. Rates continued on a steady climb until they reached $45.50 in 2000. By 2007, the monthly premium for most Medicare Part B beneficiaries had more than doubled to a standard $93.50. Rates peaked in 2011 at $115.40 per month for Medicare Part B coverage. In 2012, Medicare reduced the premium to $99.90.
Monthly data compiled by the Social Security Administration shows the rates for "most" beneficiaries. Some Medicare beneficiaries pay more and some less or nothing at all. Some low-income recipients qualify for programs that assist with the monthly premium cost. State Medicaid programs are one example. Conversely, those in higher-income brackets began paying more in monthly premium cost in 2007. In 2014, an income of more than $85,000 for a single individual or $170,000 for married beneficiaries was considered "higher" and subject to additional premium cost.
Vicki A Benge began writing professionally in 1984 as a newspaper reporter. A small-business owner since 1999, Benge has worked as a licensed insurance agent and has more than 20 years experience in income tax preparation for businesses and individuals. Her business and finance articles can be found on the websites of "The Arizona Republic," "Houston Chronicle," The Motley Fool, "San Francisco Chronicle," and Zacks, among others.