The Centers for Medicare and Medicaid has announced the Medicare premiums- deductibles- and coinsurances for 2016.
As expected and for the third year in a row- the Medicare Part B premium that most recipients pay will hold steady at $104.90 a month. However- an estimated 30% of Medicare beneficiaries will pay an increased premium amount of $121.80 per month.
Meanwhile- the Part B deductible will increase for all beneficiaries from $147 to $166 in 2016.
The Part B increase was supposed to be much steeper for the 30% of beneficiaries who are not “held harmless” from any increase in premiums when Social Security benefits remain stagnant- as will be the case for 2016. But the premium rise was blunted by the Bipartisan Budget Act signed into law by President Obama on November 2- 2015. Medicare beneficiaries who are unprotected from a premium increase include those enrolled in Medicare but who are not yet receiving Social Security- new Medicare beneficiaries- seniors earning more than $85-000 a year- and “dual eligibles” who receive both Medicare and Medicaid benefits.
For beneficiaries receiving skilled care in a nursing home- Medicare’s coinsurance for days 21-100 will increase from $157.50 per day to $161 per day. Medicare coverage ends after day 100. (See Medicare’s nursing home coverage.)
Here are all the new Medicare figures:
- Basic Part B premium: $104.90/month (unchanged)
- Part B premium for those not “held harmless”: $121.80
- Part B deductible: $166 (was $147)
- Part A deductible: $1-288 (was $1-260)
- Co-payment for hospital stay days 61-90: $322/day (was $315)
- Co-payment for hospital stay days 91 and beyond: $644/day (was $630)
- Skilled nursing facility co-payment- days 21-100: $161/day (was $157.50)
Higher-income beneficiaries will pay higher Part B 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 $170.50 (was $146.90).
- 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 $243.60 (was $209.80).
- 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 $316.70 (was $272.70).
- 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 $389.80 (was $335.70).
Rates differ for beneficiaries who are married but file a separate tax return from their spouse:
- Those with incomes between $85-000 and $129-000 will pay a monthly premium of $316.70 (was $272.70).
- Those with incomes greater than $129-000 will pay a monthly premium of $389.80 (was $335.70).
The Social Security Administration uses the income reported two years ago to determine a Part B beneficiary’s premiums. So the income reported on a beneficiary’s 2014 tax return is used to determine whether the beneficiary must pay a higher monthly Part B premium in 2016. Income is calculated by taking a beneficiary’s adjusted gross income and adding back in some normally excluded income- such as tax-exempt interest- U.S. savings bond interest used to pay tuition- and certain income from foreign sources. This is called modified adjusted gross income (MAGI). If a beneficiary’s MAGI decreased significantly in the past two years- she may request that information from more recent years be used to calculate the premium.
Those who enroll in Medicare Advantage plans may have different cost-sharing arrangements. The average Medicare Advantage premium is expected to decrease slightly- from $32.91 on average in 2015 to $32.60 in 2016.
For further reading, see these resources on Medicare’s press release announcing the new figures, Medicare costs at a glance, and ElderLawAnswers’ guide to Medicare.