After holding down nearly consistent rates for 4 years, the Centers for
Medicare & Medicaid Services raised the cost for Part A and Part B
premiums and deductibles. The standard Medicare Part B premium, which
most participants pay, has seen a 4% rise, changing from $104.90 per month
to $109. However, about 30% of beneficiaries will see a 10% rise in their
Part B premiums and all Part B participants will pay a higher deductible.
Approximately 70% of beneficiaries are protected from the increase because
of the “hold harmless” provision, which protects Social Security
checks from declining in correlation to Medicare cost increases. Recipients
of Social Security checks are typically those on disability or in retirement.
The remaining 30% of beneficiaries must, therefore, make up the cost increase
for the whole. The 30% not included in the “hold harmless”
rule includes beneficiaries who do not receive Social Security benefits,
those who enroll in Part B for the first time in 2017, those directly
billed for their Part B premium, those dually eligible for
Medicaid and Medicare, and those who pay an income-related premium.
2017 Medicare Part B Rates:
- Premium: $134 (was $121.80)
- Premium with “hold harmless”: $109 (was $104.90)
- Deductible: $183 (was $166)
2017 Medicare Part A Rates:
- Co-payment for hospital stay days 61-90: $329/day (was $322)
- Co-payment for hospital stay days 91 and up: $658/day (was $644)
- Skilled nursing facility co-payment, days 21-100: $164.50/day (was $161)
- Deductible: $1,316 (was $1,288)
Beneficiaries with income-based premiums, roughly 5%, pay more for Medicare
Part B each month. The Social Security Administration (SSA) bases the
premium on income reported for 2015 (2 years prior to the year the premium
applies to) and calculates the beneficiary’s modified adjusted gross
income (MAGI) accordingly. The MAGI is established by adding the adjusted
gross income to normally excluded income, such as tax-exempt interest,
U.S. saving bond interest, and certain income foreign income. If a beneficiary’s
MAGI drastically changes, he or she may request an evaluation based on
their most recent financial income information.
Medicare Part B Income-Based Premiums:
- Individuals with annual incomes between $85,000 and $107,000, and married
couples with annual incomes between $170,000 and $214,000, will pay a
monthly premium of $187.50 (was $170.50).
- Individuals with annual incomes between $107,000 and $160,000, and married
couples with annual incomes between $214,000 and $320,000, will pay a
monthly premium of $267.90 (was $243.60).
- Individuals with annual incomes between $160,000 and $214,000, and married
couples with annual incomes between $320,000 and $428,000, will pay a
monthly premium of $348.30 (was $316.70).
- Individuals with annual incomes of $214,000 or more, and married couples
with annual incomes of $428,000 or more, will pay a monthly premium of
$428.60 (was $389.80).
For those who are married but file separate tax returns from their spouse:
- Those with annual incomes between $85,000 and $129,000 will pay a monthly
premium of $348.30 (was $316.70).
- Those with annual incomes greater than $129,000 will pay a monthly premium
of $428.60 (was $389.80).
With the changes in Medicare premiums and deductibles, many beneficiaries
will see an increase in fees charged annually and monthly. Luckily, even
more will see only a slight increase or very minimal change because of
the “hold harmless” provision. For Medicare Advantage beneficiaries
and those with prescription drug plans, there will be no change in cost
for either premiums or deductibles.
For more information about the changes to Medicare premiums and deductibles, click here.
To see the original press release about the 2017 Medicare changes, click here.
If you’d like to discuss issues with your healthcare, contact Jorgensen, Brownell & Pepin, P.C.