The Centers for Medicare and Medicaid has announced the Medicare premiums- deductibles- and coinsurances for 2017. After holding steady at $104.90 a month for four years- the standard Medicare Part B premium that most recipients pay will rise 4 percent to about $109 a month. However- approximately 30 percent of beneficiaries will see their Part B premium rise from $121.80 to $134 a month- a 10 percent increase. Meanwhile- all beneficiaries will face a higher Part B deductible- which will go from the current $166 to $183 in 2017.
The reason for the two different Part B premiums is that about 70 percent of beneficiaries are protected from any increase in premiums when Social Security benefits remain stagnant- as has been the case for the last several years. Medicare beneficiaries who are unprotected from a premium rise 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 inch up from $161 to $164.50. Medicare coverage ends after day 100.
Here are all the new Medicare payment figures:
- Basic Part B premium: $109/month (was $104.90)
- Part B premium for those not protected: $134 (was $121.80)
- Part B deductible: $183 (was $166)
- Part A deductible: $1-316 (was $1-288)
- Co-payment for hospital stay days 61-90: $329/day (was $322)
- Co-payment for hospital stay days 91 and beyond: $658/day (was $644)
- Skilled nursing facility co-payment- days 21-100: $164.50/day (was $161)
So-called “Medigap” policies can cover some of these costs.
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 $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).
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 $348.30 (was $316.70).
- Those with incomes greater than $129-000 will pay a monthly premium of $428.60 (was $389.80).
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 2015 tax return is used to determine whether the beneficiary must pay a higher monthly Part B premium in 2017. 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 $32.60 on average in 2016 to $31.40 in 2017.
For further reading, see Medicare’s press release announcing the new premium and deductible amounts and Medicare costs at a glance.
