When it comes to the 2018 Medicare premium, there’s good news and bad news.
The good news? The standard monthly Part B premium, which is what roughly 30 percent of Medicare beneficiaries pay, will stay at 2017’s rate of $134 next year.
Now the bad news.
Most people on Medicare pay a lower premium because they’ve been shielded from premium increases when Social Security benefits remain unchanged, as they have for the last few years.
But due to the two percent Social Security increase for 2018, those premiums could see a substantial jump.
Around 42 percent of these beneficiaries will pay the full monthly premium of $134 — up for $109 — due to the increase in their Social Security benefit.
The rest will pay less than $134, as their Social Security benefit increase won’t be big enough to cover the full Part B premium increase. The average premium for these people will go from $109 to $130 a month, according to the Centers for Medicare and Medicaid Services (CMS).
In other words, Medicare beneficiaries who have were protected from a premium increase will pay more, while those who have been unprotected will pay the same.
Beneficiaries unprotected from premium increases over the past few years include those enrolled in Medicare but who aren’t yet receiving Social Security, new Medicare beneficiaries, seniors who make more than $85,000 a year, and “dual eligibles” who receive both Medicare and Medicaid benefits.
Philip Moeller, author of Get What’s Yours for Medicare, has this useful way to calculate out what your Part B change will be: “Subtract your current Part B premium from $134. Then multiply your current monthly Social Security benefit by 2 percent. Your 2018 Part B premium change should be the smaller of these two numbers.”
The Part B deductible will stay at $183 in 2018, while the Part A deductible will go up by $24, to $1,340. For beneficiaries receiving skilled nursing home care, Medicare’s coinsurance for days 21-100 will creep up from $164.50 to $167.50. Medicare coverage ends after day 100.
Here is a breakdown of all the new Medicare payment figures:
- Part B premium for protected beneficiaries: Average of $130 per month
- Part B premium for those not protected: $134 (unchanged)
- Part B deductible: $183 (unchanged)
- Part A deductible: $1,340 (was $1,316)
- Co-payment for hospital stay days 61-90: $335/day (was $329)
- Co-payment for hospital stay days 91 and beyond: $670/day (was $658)
- Skilled nursing facility co-payment, days 21-100: $167.50/day (was $164)
Premiums for higher-income beneficiaries will remain the same as they were in 2017:
- Individuals with annual incomes between $85,000 and $107,000 and married couples with annual incomes between $170,000 and $214,000 will pay a monthly premium of $187.50.
- Individuals with annual incomes between $107,000 and $160,000 and married couples with annual incomes between $214,000 and $320,000 will pay a monthly premium of $267.90.
- Individuals with annual incomes between $160,000 and $214,000 and married couples with annual incomes between $320,000 and $428,000 will pay a monthly premium of $348.30.
- Individuals with annual incomes of $214,000 or more and married couples with annual incomes of $428,000 or higher will pay a monthly premium of $428.60.
Rates will be different for married beneficiaries who file a separate tax return from their spouse. Those with incomes higher than $85,000 will pay a monthly premium of $428.60.
The government uses the income reported two years ago to determine Part B beneficiary’s premiums. That means income you reported on your 2016 tax return determines whether you must pay a higher monthly Part B premium in 2018.
Income is calculated by taking your adjusted gross income and adding in some normally excluded income: tax-exempt interest, U.S. savings bond interest used to pay tuition, and certain income from foreign sources. This is called modified adjusted gross income (MAGI). If the MAGI decreased significantly in the past two years, you can request that information from more recent years be used to calculate the premium. You can also request to reverse a surcharge if your income changes.
People who enroll in Medicare Advantage plans may have different cost-sharing arrangements. CMS estimates that the Medicare Advantage average monthly premium will decrease by about six percent this year, from $31.91 down to $30.
To learn the ins and outs of the Medicare system, contact Yorkway Law. Our attorneys look forward to working with you to make sure you and your loved ones get the coverage you need.