Every year about this time The Centers for Medicare and Medicaid (CMS) announce the Medicare Part B premium and deductible for the coming year. They also address changes to the Part A premium although this affects very few people. Most of the media in a move to drive traffic to their websites heralded huge increases in Medicare Part B premiums leading up to this announcement.
Prior legislation meant that people newly eligible for Medicare would pay more in premiums but the increase for those already enrolled was somewhat uncertain. I had written in a prior post that premiums would likely stay the same. The news is now in. CMS has announced a small increase in 2017 Part B premiums as well as changes to the Part B deductible.
Medicare premium and deductible changes
The Medicare Part A premium which only affects people who did not work and contribute to payroll taxes for 40 quarter over their working life will increase $2 per month to $417. Determining your Part B premium involves taking your individual situation into consideration.
For the vast majority of people Part B premium and deductible changes are as follows:
- The Part B premium will increase $4.10 per month to $109.
- The Part B deductible will increase $17 to $183.
This means that if you use your outpatient benefits (Part B) and have your premiums deducted automatically from your Social Security you will see your 2017 costs increase $66.20 over 2016. If you don’t have your premiums deducted automatically or if you earn over $85,000 as an individual you will pay higher premiums.
If you are becoming eligible for Medicare in 2017 your Part B premium will be $134 per month and higher if you have an income over $85,000.
Medicare Part A premium and deductible changes in 2017
If you are hospitalized your Part A benefits will help pay your covered costs. The changes are as follows:
- The Medicare Part A deductible will increase $28.
- You will continue to pay $0 for days 1-60.
- Days 61-90 you will see a $7 increase to $329 per day.
- Days 91 and beyond a $14 increase will apply for each lifetime reserve day (60 over lifetime).
What this really means to you bottom line
If you are enrolled in a Medicare Advantage Plan or a Medicare supplement policy you may not initially feel the pinch as much as someone insured only by original Medicare. Everyone will see a small increase in Part B premiums and if you are becoming eligible for Medicare in 2017 you’ll pay a price for being a year younger.
If you have an Advantage Plan you shouldn’t be greatly affected by these changes as your plan will generally cover the Part A and Part B deductibles. These costs are also partially covered by your own cost sharing in the form of coinsurance and copays.
If you bought a Medicare supplement your increased costs will depend on which plan you purchased. If you are responsible for your Part B deductible you will see that $17 increase in 2017. You should not be affected by increases in the cost of hospitalization. That said, you insurer could increase your premium but increases in care will be a bigger driver of increase than these small changes announced by CMS.
If you are not enrolled in a Medicare Advantage Plan (or haven’t compared plans for 2017) will will be more affected by these changes and you would be smart to compare all available plans now. You can also shop for a Medicare supplement to help minimize the affects of these increases.