On November 17, the Centers for Medicare and Medicaid Services (CMS) announced premiums, deductibles and coinsurance amounts for Original Medicare (Parts A and B). Medicare Part A enrollees will see slight increases in coinsurance rates and the yearly deductible. For new customers and those who aren’t receiving Social Security benefits, premium rates are expected to stay the same as last year under Part B. Existing customers and those receiving Social Security benefits can expect a substantial increase thanks to Social Security’s cost-of-living adjustment (COLA), which is 2 percent this year. Under the “hold harmless” provision of Social Security, Medicare enrollees are protected from Part B premium increases if their COLA is too low to compensate, which has been the case in recent years. This year’s boost in the COLA raises the premium for those protected by the hold harmless clause.
2018 Part A Costs
Most people don’t pay a premium for Medicare Part A. If you don’t have enough work credits, however, you will pay a premium for Part A, which is hospital coverage. In 2018, the premium for Part A is $232 a month if you have 30 to 39 work credits, a $5 increase over 2017. The full premium for Part A is $422 a month next year, a $9 increase, if you have fewer than 30 work credits. Coinsurance rates and the deductible will also increase in 2018:
- Deductible for inpatient hospital stays: $1,340
- Daily coinsurance rate for days 61 to 90 in a hospital: $335
- Daily coinsurance rate for lifetime reserve days after day 90: $670
- Coinsurance rate for stays in a skilled nursing facility (days 21 to 100): $167.50
People with certain disabilities and those who haven’t earned the full 40 work credits required to enroll in premium-free Part A will have to pay a premium, but this isn’t common. The CMS reported that about 99 percent of Part A enrollees have premium-free coverage because they’ve met the work requirement of 40 credits by the time they draw benefits.
2018 Part B Costs
Medicare Part B covers doctor visits, outpatient services and other medically necessary care. In 2018, new Part B enrollees and those with higher incomes will see a couple of big changes. For those who have been protected by the hold harmless provision in recent years, the standard premium will jump by about 23 percent over last year’s rate, increasing to $134 a month in 2018. Part B customers who weren’t protected by the hold harmless provision will pay the same amount, meaning they won’t experience a price increase this year.
Some beneficiaries won’t pay the standard amount since their cost-of-living adjustment won’t be enough to compensate for the higher Part B premium. In these cases, they’ll pay less. Among enrollees protected by the hold harmless provision, 28 percent will pay less than $134 a month for Part B coverage.
Higher-income Part B customers may also see price increases for 2018 Part B coverage. Changes to the classification system of the income-related monthly adjustment amounts (IRMAA), which are surcharges applied to premiums of high-income enrollees, will force some enrollees into higher income brackets. The IRMAA tiers now look like this:
|If you earned (single tax filing):||If you earned (joint tax filing):||You’ll pay:|
|Up to $85,000||Up to $170,000||$134 a month|
|Over $85,000 to $107,000||Over $170,000 to $214,000||$187.50 a month|
|Over $107,000 to $133,500||Over $214,000 to $267,000||$267.90 a month|
|Over $133,500 to $160,000||Over $267,000 to $320,000||$348.30 a month|
|Over $160,000||Over $320,000||$428.60 a month|
The same number of tiers exist in 2018, but the income brackets have changed. There’s now a lower threshold for higher-income enrollees to pay the maximum IRMAA surcharge. If your income falls into one of these categories, then you’ll pay a surcharge on top of the standard Part B premium. The CMS noted that only 5 percent of Part B customers meet the income requirements for IRMAA. For all Part B enrollees, the annual deductible will be the same as it was last year at $183.