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.