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. today!