On Friday, CMS released the costs for Original Medicare coverage for 2018. Medicare Part B premiums will rise for many, but not for all.
About 70 percent of Medicare Part B enrollees will see an increase from the average $109 premium they paid in 2017. In the coming year, Social Security benefits will increase by approximately 2 percent, due to the cost of living adjustment. This means that many Part B enrollees, specifically the ones who are “held harmless,” will see their premiums affected by this inflation. For those whose Social Security benefits are greater than or equal to an increase in their Part B premiums (about 42%), they will have to pay the full monthly premium of $134. For those whose Social Security benefits will not be large enough to cover the increase (28%), they will pay an average of $130 a month..
However, 30 percent of Part B enrollees will not see a change in their $134 Part B premium from 2017 to 2018. This group is referred to as not being “held harmless,” meaning they fall into at least one of the following categories: they do not receive social security benefits, they are enrolling in Part B for the first time in 2018, they are dually eligible for Medicaid so their premium is covered by the state, they are billed directly for their Part B premium, or they pay a premium that is income-related.
For about a decade, beneficiaries with higher incomes have paid steeper Medicare Part B monthly premiums. You can view the table of annual incomes and the corresponding premium amounts here.
The Part B deductible will remain the same as it was in 2017: $183 annually.
If your clients have completed paid at least 40 quarters of Medicare taxes through employment, then they will not have to pay a Part A premium. This applies to about 99 percent of Americans (the Part A premium is $422 for those whom this doesn’t apply).
All Part A enrollees do have an annual deductible, however. The 2018 annual inpatient deductible for Medicare Part A will be $1,340, $24 more than 2017. This covers the first 60 days of care the beneficiary receives. For days 61 through 90, the patient must pay $335 per day, which is up $6 from 2017. For lifetime reserve days, the cost will now be $670 a day, which is $12 more than the cost in 2017.
On a positive note, the projected average monthly premium for Medicare Advantage plans is down six percent to $30 per month. Additionally, the average price of a prescription drug plan is projected to decline to about $33.50 per month. This is approximately a $1.20 drop compared to the $34.70 premium in 2017.
Deductibles and premiums for Medicare Advantage and Medicare prescription drug plans are already finalized and are unaffected by this announcement.