This report from the Kaiser Family Foundations examines the recently approved changes to Medicare Part B and Part D that will link premiums with income. It also discusses the approximated savings that could be accumulated with these changes and the number of individuals affected.

From the report:

The Affordable Care Act (ACA) of 2010 includes two provisions that achieve Medicare savings by increasing premiums for higher-income Medicare beneficiaries. The first provision increases the number of beneficiaries subject to the income-related premium under Medicare Part B over time, by eliminating the index on income thresholds established under prior law. The second provision imposes a new income-related premium on beneficiaries enrolled in Medicare Part D. Together, these provisions are estimated to save about $36 billion over the ten-year period between 2010 and 2019.

This paper describes the two provisions related to the income-related Medicare Part B and Part D premiums and shows the projected number of beneficiaries who will be required to pay higher premiums under each provision, based on an analysis by Actuarial Research Corporation (ARC) for the Kaiser Family Foundation. The analysis is based on assumptions of income threshold growth from the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary (OACT). The paper shows the share of all Medicare Part B and D enrollees expected to pay the higher income-related premiums, and the share of “new enrollees” coming on to Medicare between 2011 and 2019 who will pay the higher premiums.

Full Report: Income-Relating Medicare Part B and Part D Premiums: How Many Medicare Beneficiaries Will Be Affected? (PDF | 1.55 MB)

Kaiser Family Foundation. (2010). Income-relating Medicare Part B and Part D premiums: how many Medicare beneficiaries will be affected?.