On October 11th, 2016, the Centers for Medicare and Medicaid Services (CMS) released the premiums for Medicare Part A and Medicare Part B. The Medicare Part A program covers areas such as inpatient hospital and skilled nursing facilities. The Medicare Part B program covers areas such as outpatient hospital and home health care needs.
According to CMS.gov, about 99 percent of Medicare recipients do not have a Part A premium because they have at least 40 quarters of Medicare covered employment. A quarter of covered employment refers to a three month calendar quarter where a person earned at least $1,260. A person age 65 and over who has less than 40 quarters of Medicare covered employment as well as certain people with disabilities pay a premium to receive Medicare Part A. Also, a person may buy into Medicare Part A at a reduced rate if they had at least 30 quarters of Medicare covered employment or were married to someone who did. For individuals in this category the premium rate will increase by $1 in 2017 to $227 per month. People with less than 30 quarters who have certain disabilities and uninsured aged will pay the full premium amount of $413 per month. This increased by $2 since 2016.
The Medicare Part A deductible will increase by $28 to $1,316 per benefit period in 2017. The deductible covers costs for the first 60 days of hospitalization. From days 61-90 the individual must pay a coinsurance amount of $329 per day compared to $322 in 2016 and $658 per day for lifetime reserve days compared to $644 in 2016. An individual in a skilled nursing facility will pay coinsurance of $164.50 for days 21 to 100, which increased from $161.00 in 2016.
Below is a chart from CMS.gov comparing the deductible and coinsurance amounts from 2016 to 2017:
Part A Deductible and Coinsurance Amounts for Calendar Years 2016 and 2017 by Type of Cost Sharing | ||
2016 | 2017 | |
Inpatient hospital deductible | $1,288 | $1,316 |
Daily coinsurance for 61st-90th Day | 322 | 329 |
Daily coinsurance for lifetime reserve days | 644 | 658 |
Skilled Nursing Facility coinsurance | 161 | 164.50 |
Fig. 1, Medicare Part B Premiums for high income beneficiaries for 2017. Chart from CMS.gov, 2017 Medicare Parts A & B Premiums and Deductibles Announced, (A federal government website managed by the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244), Oct. 11, 2016.
According to CMS.gov, due to a “hold harmless” provision, Medicare Part B premiums will be prevented from increasing for about 70 percent of recipients. For the past four years, the average premium has been approximately $104.90 for individuals in this group. For 2017, the average premium among this group will be around $109.00. The monthly premium for the remaining 30 percent of Medicare Part B beneficiaries will be approximately $134.00 for 2017. It will have increased about 10 percent from 2016, which was $121.80.
The annual deductible for all Medicare Part B beneficiaries was $166.00 in 2016. This will increase in 2017 to $183.00. The premiums and deductibles for Medicare Advantage and prescription drug plans will be unaffected.
About five percent of Medicare Part B recipients tend to pay higher monthly premiums due to higher incomes. Below is a table from CMS.gov for Medicare Part B premiums for high income recipients for 2017:
Beneficiaries who file an individual tax return with income: | Beneficiaries who file a joint tax return with income: | Income-related monthly adjustment amount | Total monthly premium amount |
Less than or equal to $85,000 | Less than or equal to $170,000 | $0.00 | $134.00 |
Greater than $85,000 and less than or equal to $107,000 | Greater than $170,000 and less than or equal to $214,000 | 53.50 | 187.50 |
Greater than $107,000 and less than or equal to $160,000 | Greater than $214,000 and less than or equal to $320,000 | 133.90 | 267.90 |
Greater than $160,000 and less than or equal to $214,000 | Greater than $320,000 and less than or equal to $428,000 | 214.30 | 348.30 |
Greater than $214,000 | Greater than $428,000 | 294.60 | 428.60 |
Fig. 2, Medicare Part B Premiums for high income beneficiaries for 2017. Chart from CMS.gov, 2017 Medicare Parts A & B Premiums and Deductibles Announced, (A federal government website managed by the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244), Oct. 11, 2016.
Below is a table from CMS.gov showing premiums for married people living with a spouse, but file a separate tax return:
Beneficiaries who are married and lived with their spouse at any time during the year, but file a separate tax return from their spouse: | Income-related monthly adjustment amount | Total monthly premium amount |
Less than or equal to $85,000 | $0.00 | $134.00 |
Greater than $85,000 and less than or equal to $129,000 | 214.30 | 348.30 |
Greater than $129,000 | 294.60 | 428.60 |
Fig. 3, Medicare Part B Premiums for high income beneficiaries for 2017. Chart from CMS.gov, 2017 Medicare Parts A & B Premiums and Deductibles Announced, (A federal government website managed by the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244), Oct. 11, 2016.