How much will your Medicare cost in the coming year? The numbers just came out, so let’s go over them.
We’ll start with the Medicare Part B premium. Part B covers doctor services, outpatient hospital services, certain home health services, durable medical equipment, and other items.
The standard monthly premium for people with Part B will be $134 for 2018, the same amount as in 2017.
Under the law, people with Part B pay 25 percent of the costs of running the program, with the government picking up 75 percent.
A statutory “hold harmless” provision applies each year to about 70 percent of Part B enrollees. For these enrollees, any increase in Part B premiums must be lower than any cost-of-living increase in their Social Security benefits.
After several years of no or very small increases, Social Security benefits will increase by 2 percent in 2018 due to a cost-of-living adjustment. Therefore, some beneficiaries who were held harmless against Part B premium increases in prior years will see a higher premium in 2018.
Part B enrollees held harmless in 2016 and 2017 will see an increase in their Part B premiums from the roughly $109, on average, they paid in 2017. An estimated 42 percent of Part B enrollees are subject to the hold harmless provision in 2018 but will pay the full premium of $134, because the increase in their Social Security benefit will be greater than or equal to an increase in their Part B premiums up to the full 2018 amount.
About 28 percent of Part B enrollees are subject to the hold harmless provision in 2018 but will pay less than the full $134 premium. That’s because the increase in their Social Security benefit isn’t big enough to cover the full Part B premium increase.
The remaining 30 percent of Part B enrollees aren’t subject to the hold harmless provision and will pay the full $134 per month in 2018. This group includes beneficiaries who don’t receive Social Security benefits; enroll in Part B for the first time in 2018; are directly billed for their Part B premium; are eligible for both Medicare and Medicaid and have their premiums paid by state Medicaid agencies; and pay higher premiums because their incomes are higher.
Since 2007, beneficiaries with higher incomes have paid higher Part B premiums. These higher premiums apply to about 5 percent of people with Part B.
The annual deductible for Part B will be $183 in 2018, the same amount as in 2017.
Now let’s take a look at Medicare Part A, which covers inpatient hospital care, skilled nursing services, and some home health services.
About 99 percent of Medicare beneficiaries don’t pay any Part A premium since they’ve worked for at least 40 quarters in Medicare-covered jobs.
The Part A deductible that beneficiaries pay when admitted to the hospital in 2018 will be $1,340 per benefit period, a rise of $24 from 2017. The Part A deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period.
Beneficiaries must pay a coinsurance amount of $335 per day for the 61st through 90th day of a hospitalization (versus $329 in 2017) in a benefit period, and $670 per day for lifetime reserve days ($658 in 2017).
For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $167.50 in 2018 ($164.50 in 2017).
You can find an explanation of benefit periods (and lots of other valuable information) in the “Medicare & You” handbook, at https://www.medicare.gov/medicare-and-you/medicare-and-you.html