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 2020 annual deductible for Medicare Part A will be $1,408, 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 2020.
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 2020 will be $144.60. 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 2020 will be $198 for all Medicare beneficiaries.
What This Means For Current Policy Holder
- The Part A Medicare deductible in 2020 will increase to $1,408 but most will pay nothing.
- Your Social Security benefits and costs will increase by 0.3 percent for 2019.
- About 30 percent of Medicare beneficiaries will face an increase in Part B monthly premiums, to $144.60 for 2020.
- The Part B annual deductible for all Medicare beneficiaries will increase to $198 for 2020.
- Higher earners may have to pay more for their Medicare Part B.
Nothing on this website should ever be used as a substitute for professional medical advice. You should always consult with your medical provider regarding diagnosis or treatment for a health condition, including decisions about the correct medication for your condition, as well as prior to undertaking any specific exercise or dietary routine.