Thursday, October 31, 2013

Medicare Part B Premium Stays Flat in 2014

The Centers for Medicare and Medicaid Services (CMS) announced earlier this week that the premiums for Medicare Part B will remain at $104.90 per month, the same as in 2013.  The Medicare Part B deductible also will remain unchanged at $147.

CMS stated that health care reform efforts are eliciting significant out-of-pocket savings for Medicare beneficiaries, pointing to zero growth in 2014 Medicare Part B premiums and deductibles, and more than $8 billion in cumulative savings in the prescription drug gap known as the “donut hole.”

According to CMS, since the Affordable Care Act provision to close the donut hole took effect, more than 7.1 million seniors and people with disabilities who reached the donut hole have saved $8.3 billion on their prescription drugs.  In the first nine months of 2013 nearly 2.8 million people nationwide who reached the donut hole this year have saved $2.3 billion, an average of $834 per beneficiary.  These figures are higher than at this point last year (2.3 million beneficiaries had saved $1.5 billion for an average of $657 per beneficiary).

The health care law gave those who reached the donut hole in 2010 a one-time $250 check, then began phasing in discounts and coverage for brand-name and generic prescription drugs beginning in 2011.  The donut hole ultimately will be closed in the year 2020.

Medicare Parts A and B Premiums and Part A Deductible

By law, the standard Part B premium represents roughly one-fourth of the average cost for beneficiaries aged 65 and over, plus a contingency margin to provide for possible variations between actual and projected costs.  Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and other items.

Since 2007, Medicare beneficiaries have been subjected to higher Part B monthly premiums based on income.  These income-related monthly premiums, which affect approximately 5% of Medicare beneficiaries, also will remain the same as they were in 2013.

The Medicare Part A premium, which pays for inpatient hospital, skilled nursing facility, and some home health care services, will drop $15 in 2014 to $426.  Although nearly all Medicare beneficiaries do not have to pay a premium for Part A (since they have at least 40 quarters of Medicare-covered employment), enrollees age 65 and over and certain persons with disabilities who have fewer than 30 quarters of coverage pay a monthly premium in order to receive coverage under Part A.  Beneficiaries who have between 30 and 39 quarters of coverage may buy into Part A at a reduced monthly premium rate of $234 for 2014, which reflects a $9 decrease from 2013.

The Medicare Part A deductible that applies when beneficiaries are first admitted to the hospital will be $1,216 in 2014, which is an increase of $32 from this year's $1,184 deductible.

For additional information on Medicare, including the 2014 income-related monthly premium rates for Medicare Part B, please click here to read CMS' October 28th press release.

Until next time,


Andrew Herman
AH Insurance Services, Inc.

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