The Centers for Medicare and Medicaid has announced the Medicare premiums, deductibles, and coinsurances for 2017. After holding steady at $104.90 a month for four years, the standard Medicare Part B premium that most recipients pay will rise 4 percent to about $109 a month. However, approximately 30 percent of beneficiaries will see their Part B premium rise from $121.80 to $134 a month, a 10 percent increase. Meanwhile, all beneficiaries will face a higher Part B deductible, which will go from the current $166 to $183 in 2017.
The reason for the two different Part B premiums is that about 70 percent of beneficiaries are protected from any increase in premiums when Social Security benefits remain stagnant, as has been the case for the last several years. Medicare beneficiaries who are unprotected from a premium rise include those enrolled in Medicare but who are not yet receiving Social Security, new Medicare beneficiaries, seniors earning more than $85,000 a year, and “dual eligibles” who receive both Medicare and Medicaid benefits.
For beneficiaries receiving skilled care in a nursing home, Medicare’s coinsurance for days 21-100 will inch up from $161 to $164.50. Medicare coverage ends after day 100.
Here are all the new Medicare payment figures:
- Basic Part B premium: $109/month (was $104.90)
- Part B premium for those not protected: $134 (was $121.80)
- Part B deductible: $183 (was $166)
- Part A deductible: $1,316 (was $1,288)
- Co-payment for hospital stay days 61-90: $329/day (was $322)
- Co-payment for hospital stay days 91 and beyond: $658/day (was $644)
- Skilled nursing facility co-payment, days 21-100: $164.50/day (was $161)
So-called “Medigap” policies can cover some of these costs.
Higher-income beneficiaries will pay higher Part B premiums:
- 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 (was $170.50).
- 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 (was $243.60).
- 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 (was $316.70).
- Individuals with annual incomes of $214,000 or more and married couples with annual incomes of $428,000 or more will pay a monthly premium of $428.60 (was $389.80).
Rates differ for beneficiaries who are married but file a separate tax return from their spouse:
- Those with incomes between $85,000 and $129,000 will pay a monthly premium of $348.30 (was $316.70).
- Those with incomes greater than $129,000 will pay a monthly premium of $428.60 (was $389.80).
The Social Security Administration uses the income reported two years ago to determine a Part B beneficiary’s premiums. So the income reported on a beneficiary’s 2015 tax return is used to determine whether the beneficiary must pay a higher monthly Part B premium in 2017. Income is calculated by taking a beneficiary’s adjusted gross income and adding back in some normally excluded income, such as 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 a beneficiary’s MAGI decreased significantly in the past two years, she may request that information from more recent years be used to calculate the premium.
Those who enroll in Medicare Advantage plans may have different cost-sharing arrangements. The average Medicare Advantage premium is expected to decrease slightly, from $32.60 on average in 2016 to $31.40 in 2017.