The Centers for Medicare and Medicaid Service (CMS) have announced updates for 2017. There will be an increase in 2017 premiums and deductibles for both Part A (inpatient hospital care and nursing facilities) and Part B (physician and outpatient hospital services).
Part A Deductible Increase
While the 2017 annual deductible for Medicare Part A will be $1,316, a minor $28 increase from $1,288 in 2016, the vast majority (99 percent) of Medicare beneficiaries will pay nothing. Medicare Part A is fully covered through historical employment taxes for anyone who worked 40 quarters (10 years) or more in their lifetime.
Part B Premium Increase
Medicare Part B premium increases have become increasingly confusing to calculate. A Medicare beneficiary’s Part B start date, income level, and Social Security Income increases can all impact their Medicare Part B premium payment. To make things a little easier, Medicare has provided a Medicare Part B calculator to help determine what one’s Medicare Part B premium should be for 2017.
If already enrolled in Medicare Part B, a Medicare beneficiary might fall in to a category known as “hold harmless.” This is a relatively new provision in which people already on Medicare are only subject to a percentage increase on their Medicare Part B payments that is in line with the percentage increase in their cost-of-living adjustment (COLA) for their Social Security Income. For 2017, the cost-of-living adjustment (COLA) for Social Security benefits will be 0.3 percent. Because this percentage is so low, about 70 percent of beneficiaries will be “held harmless” from increasing Part B premiums. The average 2017 premium for the “held harmless” group will be about $109, a relatively small increase from the $104.90 premium of 2016.
For the remaining 30 percent of Medicare beneficiaries in the “non-held harmless” population, the standard monthly premium for Part B in 2017 will be $134, increasing 10 percent from the $121.80 premium of 2016. The individuals in the “non-held harmless” population are:
- Not currently receiving Social Security benefits
- Enrolling in Medicare for the first time in 2017
- Directly receiving their Part B premium bill
- Dual eligible for Medicare and Medicaid
- Higher-income ($85,000 for individuals and $170,000 for couples) and thus paying higher premiums.
Higher earners may be required to pay higher Part B premiums due to the Income Related Monthly Adjustment Amount (IRMAA) requirement. Medicare will typically consider a Medicare beneficiary’s modified adjusted gross income (MAGI) from two years ago to determine how much they will pay for your Medicare Part B premium. If the beneficiary earned more than $85,000 a year as an individual or $170,000 a year as a household, it would be helpful to visit Medicare’s website to view the 2017 IRMAA Medicare Part B premium payment tables.
The Part B annual deductible for 2017 will be $183 for all Medicare beneficiaries, increasing from $166 in 2016.
What This Means For Current Policy Holders
- The Part A Medicare deductible in 2017 will increase from $1,288 to $1,316 but most will pay nothing.
- Your Social Security benefits and costs will increase by 0.3 percent for 2017.
- About 30 percent of Medicare beneficiaries will face an increase in Part B monthly premiums, from $121.80 to $134 for 2017.
- The Part B annual deductible for all Medicare beneficiaries will increase to $183 for 2017.
- Higher earners may have to pay more for their Medicare Part B.
If you’re concerned about your coverage for the upcoming year and would like to review your Medicare coverage options, please call one of our Medicare supplement specialists directly at (866) 895-3258. Also, visit our homepage for more information about Medicare insurance.