U.S. District Court Rules ACA Unconstitutional

A federal judge for the U.S. District Court for the Northern District of Texas has ruled in favor of a lawsuit filed by his state and 19 others which claimed that Congress’ recent repeal of the ACA’s tax penalty has undone the rationale of the Supreme Court’s 2012 decision that the law is constitutional.

U.S. District Court Judge Reed O'Connor issued a decision on December 14 in Texas v. Azar declaring the individual mandate for health insurance coverage unconstitutional and ruling further that the mandate cannot be severed from the rest of the ACA, rendering the entire law invalid.

The original lawsuit by the states was filed against the U.S. Department of Health and Human Services (HHS) and the Internal Revenue Service (IRS).  Its claim against the ACA’s constitutionality rests upon the U.S. Supreme Court ruling that the individual mandate was constitutional under the powers of taxation held by Congress; however, elimination of the individual mandate’s enforcement mechanism in last year's Tax Cuts and Jobs Act did not actually eliminate the mandate.  Rather, it simply dropped the tax penalty for not having qualifying health insurance to $0 beginning in 2019.

Therefore, the lawsuit argued that the individual mandate has been retained and rendered unconstitutional, as it no longer exercises Congress’ powers of taxation.  Judge O'Connor agreed with the lawsuit’s plaintiffs and issued partial summary judgement in their favor; although he did not order an injunction against the ACA as requested in the lawsuit.

Following the December 14 ruling, HHS stated it “will continue administering and enforcing all aspects of the ACA as it had before the court issued its decision.”  The ruling is expected to be appealed by various state attorneys general and possibly will end up back at the Supreme Court.

2019 Medicare Parts A & B Premiums and Deductibles

Source for this blog post is the CMS.gov website:

  https://www.cms.gov/newsroom/fact-sheets/2019-medicare-parts-b-premiums-and-deductibles

Yesterday, the Centers for Medicare & Medicaid Services (CMS) released the 2019 premiums, deductibles, and coinsurance amounts for the Medicare Part A and B programs.

Medicare Part B Premiums/Deductibles

Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A.  

The standard monthly premium for Medicare Part B enrollees will be $135.50 for 2019, an increase of $1.50 from $134 in 2018. An estimated 2 million Medicare beneficiaries (about 3.5%) will pay less than the full Part B standard monthly premium amount in 2019 due to the statutory hold harmless provision, which limits certain beneficiaries’ increase in their Part B premium to be no greater than the increase in their Social Security benefits. The annual deductible for all Medicare Part B beneficiaries is $185 in 2019, an increase of $2 from the annual deductible $183 in 2018. Premiums and deductibles for Medicare Advantage and Medicare Prescription Drug plans are already finalized and are unaffected by this announcement.

Since 2007, a beneficiary’s Part B monthly premium is based on his or her income. These income-related monthly adjustment amounts (IRMAA) affect roughly 5 percent of people with Medicare Part B.  The total premiums for high income beneficiaries for 2019 are shown in the following table:

Beneficiaries who file  individual tax returns with income:	Beneficiaries who file joint tax returns 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	$135.50
Greater than $85,000 and less than or equal to $107,000	Greater than $170,000 and less than or equal to $214,000	$54.10	$189.60
Greater than $107,000 and less than or equal to $133,500	Greater than $214,000 and less than or equal to $267,000	$135.40	$270.90
Greater than  $133,500 and less than or equal to $160,000	Greater than $267,000 and less than or equal to $320,000	$216.70	$352.20
Greater than $160,000 and less than $500,000	Greater than $320,000 and less than $750,000	$297.90	$433.40
Greater than or equal to $500,000	Greater than or equal to $750,000	$325.00	$460.50

Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows:

Beneficiaries who are married and lived with their spouses at any time during the year, but who file separate tax returns from their spouses:	Income-related monthly adjustment amount	Total monthly premium amount
Less than or equal to $85,000	$0.00	$135.50
Greater than $85,000 and less than $415,000	$297.90	$433.40
Greater than or equal to $415,000	$325.00	$460.50

Medicare Part A Premiums/Deductibles

Medicare Part A covers inpatient hospital, skilled nursing facility, and some home health care services. About 99 percent of Medicare beneficiaries do not have a Part A premium since they have at least 40 quarters of Medicare-covered employment.

The Medicare Part A inpatient hospital deductible that beneficiaries will pay when admitted to the hospital will be $1,364 in 2019, an increase of $24 from $1,340 in 2018. The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. In 2019, beneficiaries must pay a coinsurance amount of $341 per day for the 61stthrough 90th day of a hospitalization ($335 in 2018) in a benefit period and $682 per day for lifetime reserve days ($670 in 2018). For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $170.50 in 2019 ($167.50 in 2018).

Part A Deductible and Coinsurance Amounts for Calendar Years 2018 and 2019 by Type of Cost Sharing
	2018	2019
Inpatient hospital deductible	$1,340	$1,364
Daily coinsurance for 61st-90th Day	335	341
Daily coinsurance for lifetime reserve days	670	682
Skilled Nursing Facility coinsurance	167.50	170.50

Enrollees age 65 and over who have fewer than 40 quarters of coverage and certain persons with disabilities pay a monthly premium in order to voluntarily enroll in Medicare Part A. Individuals who had at least 30 quarters of coverage or were married to someone with at least 30 quarters of coverage may buy into Part A at a reduced monthly premium rate, which will be $240 in 2019, an $8 increase from 2018. Certain uninsured aged individuals who have less than 30 quarters of coverage and certain individuals with disabilities who have exhausted other entitlement will pay the full premium, which will be $437 a month, a $15 increase from 2018.

Until next time,

Andrew Herman, President

2018 Medicare Update

The chart below provides a summary of 2018 Medicare premiums, deductibles and co-insurance, along with average increase to monthly Social Security benefits in 2018:

Medicare Part A Premium		Most people do not have to pay a monthly premium for Part A.  If you buy Part A, you will pay up to $422 each month ($422/month if you paid Medicare taxes for less than 30 quarters or $232/month if you paid Medicare taxes for 30-39 quarters)
Medicare Part A Inpatient Hospital Deductible and Co-Insurance		$1,340 deductible and no coinsurance for days 1-60 of each benefit period
		Days 1 - 60 co-insurance for each benefit period: $0
		Days 61 - 90 co-insurance per day for each benefit period: $335
		Days 91 and beyond: $670 co-insurance per each "lifetime reserve day" (up to 60 days over your lifetime)
Skilled Nursing Facility		$0 for Days 1 - 20 of each benefit period; then $167.50 per day for Days 21-100 (after Day 100 Medicare beneficiary pays all costs)
Medicare Part B Premium*		Standard Part B premium will be $134 (or higher based on your income).  However, some people who receive Social Security benefits will pay less ($130/average)
Medicare Part B Deductible		$183.00
Medicare Part D Benefits		Initial deductible: $405
		Initial coverage limit: $3,750
		Out of pocket threshold (or TrOOP): $5,000
		Coverage gap: begins once you reach your Medicare Part D plan's initial coverage limit ($3,750 in 2018) and ends when you spend a total of $5,000 in 2018.
		In 2018, Part D enrollees will receive a 65% discount on the total cost of their brand-name drugs purchased while in the donut hole. The 50% discount paid by the brand-name drug manufacturer will apply to getting out of the donut hole, however the additional 15% paid by your Medicare Part D plan will not count toward your TrOOP.
		Minimum cost sharing in Catastrophic portion: 5% or $3.35 for generic or preferred drug that is multi-source drug and the greater of 5% or $8.35 for all other drugs.
Average Monthly Social Security Increase		All Retired Workers - 2.0% increase to $1,404 (from $1,377 in 2017) All Disabled Workers - 2.0% increase to $1,197 (from $1,173 in 2017)

* From CMS:  "The standard monthly premium for Medicare Part B enrollees will be $134 for 2018, the same amount as in 2017.  However, a statutory 'hold harmless' provision applies each year to about 70% of enrollees. For these enrollees, any increase in Part B premiums must be lower than the increase in their Social Security benefits. After several years of no or very small increases, Social Security benefits will increase by 2% percent in 2018 due to the cost-of-living adjustment (COLA). Therefore, some beneficiaries who were held harmless against Part B premiums increases in prior years will have a premium increase in 2018."

According to CMS, Part B enrollees who are not subject to the hold-harmless provision will pay the full premium of $134 per month in 2018 while Part B enrollees who were held harmless in 2016 and 2017 will see an increase in the monthly Part B premium from the roughly $109, on average, they paid in 2017.

CMS estimates that 42% of all Part B enrollees are subject to the hold-harmless provision in 2018 and will pay the standard monthly premium of $134 (an increase of about $25), because the increase in their Social Security benefit will be greater than or equal to an increase in their Part B premiums up to the full 2018 amount.  Additionally, CMS estimates 28% of all Part B enrollees are subject to the hold-harmless provision in 2018 and will pay less than the full monthly premium of $134, because the increase in their Social Security benefit will not be large enough to cover the full Part B premium increase.

Medicare Part B enrollees will pay the standard $134 Part B premium amount in 2018 (or higher depending on income) if:

• You enroll in Part B for the first time in 2018.
• You don't get Social Security benefits.
• You're directly billed for your Part B premiums (meaning they aren't taken out of your Social Security benefits).
• You have Medicare and Medicaid, and Medicaid pays your premiums. (Your state will pay the standard premium amount of $134.)
• Your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount. If so, you’ll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.

If you're in 1 of these 5 groups, here's what you'll pay:

If your yearly income in 2016 (for what you pay in 2018) was			You pay each month (in 2018)
File individual tax return	File joint tax return	File married & separate tax return
$85,000 or less	$170,000 or less	$85,000 or less	$134
above $85,000 up to $107,000	above $170,000 up to $214,000	Not applicable	$187.50
above $107,000 up to $133,500	above $214,000 up to $267,000	Not applicable	$267.90
above $133,500 up to $160,000	above $267,000 up to $320,000	Not applicable	$348.30
above $160,000	above $320,000	above $85,000	$428.60

Click on the following link for additional information on Medicare Part B costs:

https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html


Or for further information on 2018 Social Security benefits click this link:

https://www.ssa.gov/news/press/factsheets/colafacts2018.pdf


Until next time,

Andrew Herman, President
AH Insurance Services, Inc.