Medicare 2025 - New Premiums and Deductibles, Changes to Part D Program

 CMS Updates Medicare Premiums, Deductibles, and Coinsurance Amounts

Last month, the Centers for Medicare & Medicaid Services (CMS) released 2025 premiums, deductibles and coinsurance amounts for the Medicare Part A and Part B programs, and the new 2025 Medicare Part D income-related monthly adjustment amounts.

Part A (Hospital Insurance) Monthly Premium

About 99% of Medicare beneficiaries do not pay a monthly Part A premium (it is required that the Medicare beneficiary or a spouse has 40+ quarters of Medicare-covered employment).

The 2025 Part A premium is $518 per month for people who are not otherwise eligible for premium-free Hospital Insurance and have less than 30 quarters of Medicare-covered employment.  With 30-39 quarters of Medicare-covered employment, the 2025 Part A premium is $285 per month.  Higher income consumers may pay more.

Part B (Medical Insurance) Monthly Premium

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.  General tax revenues, along with premiums paid by Medicare beneficiaries, fund the Part B program.

There is a special rule for Social Security recipients, called the “hold harmless rule,” ensuring that Social Security benefits will not decline from one year to the next because of an increase in the Medicare Part B premium.  Whether this rule comes into play in any year depends on the amount of Cost of Living Adjustment (COLA) and the Medicare Part B premium increase.  Medicare beneficiaries who have been protected by the hold harmless rule pay less than the standard Part B premium.  All others pay monthly 2025 Part B premiums based on the Modified Adjusted Gross Income (MAGI) as reported two years prior (i.e., 2023 federal tax return).

The standard 2025 monthly premium for Medicare Part B enrollees is $185.00, an increase of $10.30 from $174.70 in 2024.  Medicare Part B enrollees will pay the standard $185.00 Part B premium amount in 2025 unless:

• You have Medicare and Medicaid, and Medicaid pays your premiums.  (Your state will pay the standard premium amount.)
• Your modified adjusted gross income as reported on your IRS tax return from two years ago is above a certain amount.  If so, you’ll pay the standard premium amount plus an Income Related Monthly Adjustment Amount (IRMAA).
• You have been protected by the "hold harmless" rule discussed above.

Since 2007, a beneficiary’s Part B monthly premium is based on income.  These income-related monthly adjustment amounts affect approximately 8% of people with Medicare Part B.  2025 Part B premiums for Full Part B coverage (as opposed to Part B Immunosuppressive Drug Coverage only) based on MAGI from the 2023 tax return are shown in the following table:

Beneficiaries who file individual tax returns with income:	Beneficiaries who file joint tax returns with income:	2025 Part B premium not held harmless	Premium level
Less than or equal to $106,000	Less than or equal to $212,000	$185.00	Standard
Greater than $106,000 and less than or equal to $133,000	Greater than $212,000 and less than or equal to $266,000	$259.00	1.4 x standard
Greater than $133,000 and less than or equal to $167,000	Greater than $266,000 and less than or equal to $334,000	$370.00	2.0 x standard
Greater than $167,000 and less than or equal to $200,000	Greater than $334,000 and less than or equal to $400,000	$480.90	2.6 x standard
Greater than $200,000 and less than $500,000	Greater than $400,000 and less than $750,000	$591.90	3.2 x standard
Greater than or equal to $500,000	Greater than or equal to $750,000	$628.90	3.4 x standard

For tables for married beneficiaries who file separate returns, and for Part B Immunosuppressive Drug Coverage only, click here:  https://ahinsuranceservices.com/medicarepremiums.html.

Part D (Prescription Drug Coverage) Monthly Premium

Since 2011, Medicare beneficiaries’ Part D premiums have been based on income.  In addition to any Part D plan premium, there is an income-related monthly adjustment amount (IRMAA) impacting higher income earners.  Part D plan premiums vary from plan to plan (when Part D benefits are included in a Part C Medicare Advantage plan, premiums often are zero).  Beneficiaries may pay Part D premiums directly to the plan or have them deducted from Social Security benefits; however, any IRMAA must be deducted from Social Security benefits or otherwise paid directly to Medicare.  2025 Part D IRMAA figures are shown in the following table: 

Beneficiaries who file individual tax returns with income:	Beneficiaries who file joint tax returns with income:	2025 Part D base premium*	IRMAA
Less than or equal to $106,000	Less than or equal to $212,000	Plan premium	$0
Greater than $106,000 and less than or equal to $133,000	Greater than $212,000 and less than or equal to $266,000	Plan premium	$13.70
Greater than $133,000 and less than or equal to $167,000	Greater than $266,000 and less than or equal to $334,000	Plan premium	$35.30
Greater than $167,000 and less than or equal to $200,000	Greater than $334,000 and less than or equal to $400,000	Plan premium	$57.00
Greater than $200,000 and less than $500,000	Greater than $400,000 and less than $750,000	Plan premium	$78.60
Greater than or equal to $500,000	Greater than or equal to $750,000	Plan premium	$85.80

For married beneficiaries who file separately, click here:

https://ahinsuranceservices.com/medicarepremiums.html.

Part A (Hospital Insurance) Deductible and Coinsurance Amounts

In 2025, the Medicare Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital will be $1,676, an increase of $44 from $1,632 in 2024.  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 2025, beneficiaries must pay a coinsurance amount of $419 per day for the 61st through 90th day of a hospitalization ($408 in 2024) in a benefit period and $838 per day for lifetime reserve days ($816 in 2024).  For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $209.50 in 2025 ($204.00 in 2024).

Part B (Medical Insurance) Deductible

The annual deductible for all Medicare Part B beneficiaries will be $257 in 2025, an increase of $17 from the annual deductible of $240 in 2024.

2025 Changes to Medicare Part D (Prescription Drug Coverage)

Medicare Part D coverage, whether on a Stand-alone basis or included within a Part C Medicare Advantage plan, can include a yearly deductible up to $590 in 2025.  This is an increase of $45 from $545 in 2024.  Many Part D plans that have a deductible apply it only to higher cost prescriptions such as those classified in Drug Tier 3 and higher.

Notable Part D Program changes coming in 2025 are as follows:

The Coverage Gap (also known as the "Donut Hole") will be completely eliminated.

Under the original Part D program, Part D enrollees faced up to 100% of total drug costs during a Coverage Gap stage.  Years later, the 100% amount was reduced to 25%.  In 2025, Part D enrollees will no longer face any increase in cost sharing due to hitting the cost threshold that would trigger the dreaded Donut Hole, as it has been eliminated.

Part D enrollees' out-of-pocket drug costs will be capped at $2,000 in 2025.  This amount will be indexed to rise each year at the rate of growth in per capita Part D costs (this cap does not apply to out-of-pocket spending on prescription drugs covered under Medicare Part B).

You might spend even less if you are one of the roughly 75% of Part D members with an “enhanced” Part D plan, which may provide extra credit toward the out-of-pocket cap.  When enhanced plans have benefits that reduce out-of-pocket spending, the value of those benefits can count toward your $2,000 cap.)  As a result, many Medicare beneficiaries will hit the cap before actually spending $2,000 in out-of-pocket costs.

It is important to keep in mind that only medicines listed in your plan's Part D formulary count toward the $2,000 out-of-pocket cap.  There may be certain exceptions, such as when a plan agrees to cover a non-formulary drug due to individual circumstances (this typically requires the prescribing physician to document medical need). 

Part D plans and drug manufacturers will pay a larger share of costs for Catastrophic Coverage beyond the $2,000 cap, and Medicare will pay a smaller share.  Medicare's share of total costs will decrease from 80% to 20% for brand-name drugs and from 80% to 40% for generic drugs beginning in 2025.  Medicare Part D plans' share of costs will increase from 15% to 60% for both brands and generics above the cap, and drug manufacturers will be required to provide a 20% price discount on brand-name drugs.

Part D plans and manufacturers will face changes to their share of total drug costs paid in the Initial Coverage stage.  In this stage (i.e. after any plan deductible has been met and before Catastrophic coverage), drug manufacturers will be required to provide a 10% discount on brand-name drugs (this replaces the 70% discount in the Coverage Gap stage under the current design).  Part D plans will pay 65% of brand-name drug costs.

One additional change coming in 2025 is the Medicare Prescription Payment Plan, which is a new, optional way to pay out-of-pocket costs over time.  It works like a “buy now, pay later option” for Medicare Part D deductibles, copays and/or coinsurance.

The payment plan is a potential budgeting tool, not something that will save you money.  Total costs remain the same, and plans cannot charge fees or interest because you participate.  The Medicare Prescription Payment Plan could be helpful if you have expensive medications and incur high out-of-pocket costs early in the year, for example. 

All 2025 Medicare Part D plans will offer the Medicare Prescription Payment Plan, and plans will be required to reach out to you if they identify you as likely to benefit from the program.  Enrollment in this optional program is done through your Part D plan.

Until next time,

Andrew Herman

2023 Medicare – New Expanded Enrollment Access, Update to Premiums and Deductibles, and New Immunosuppressive Drug Benefit

CMS Updates Medicare Enrollment and Eligibility Rules

On October 28, 2022, the Centers for Medicare & Medicaid Services (CMS) issued a final rule effective on January 1, 2023, updating Medicare enrollment and eligibility rules to expand coverage for people with Medicare and advance health equity.  Among the changes, Medicare coverage now becomes effective the month after enrollment for individuals signing up in the last three months of their Initial Election Period, or in the General Election Period, thereby reducing potential gaps in coverage.

The rule also expands access through Medicare special enrollment periods (SEPs) and allows eligible beneficiaries to receive Medicare Part B coverage without a late enrollment penalty.  Examples of new SEPs created by this rule are SEPs for eligible individuals who miss an enrollment opportunity because:

1. They were impacted by a disaster or government-declared emergency;
2. Their employer or health plan materially misrepresented information related to timely enrollment in Medicare Part B;
3. They were incarcerated; and
4. Their Medicaid coverage was terminated after the COVID-19 Public Health Emergency (PHE)s ends or on or after January 1, 2023 (whichever is earlier).

These changes are related to Original Medicare A/B eligibility only.  They do not apply to Medicare Advantage.  The effective dates and SEPs for Medicare Advantage remain unchanged.

The final rule also establishes a new immunosuppressive drug benefit that extends vital Medicare immunosuppressive drug coverage to individuals who have had a kidney transplant and otherwise would lose Medicare coverage.

To view the final rule, refer to this link:

https://www.federalregister.gov/documents/2022/11/03/2022-23407/medicare-program-implementing-certain-provisions-of-the-consolidated-appropriations-act-2021-and.

2023 Medicare Part A Premium, Deductible, and Coinsurance Amounts

Medicare Part A covers inpatient hospital, skilled nursing facility, and some home health care services.  About 99 percent of Medicare beneficiaries qualify for premium-free Part A due to having at least 40 quarters of their own Medicare-covered employment (or the work history of a spouse), or two years having passed from initial eligibility for Social Security Disability benefits.

Enrollees aged 65 and over who have fewer than 40 quarters of coverage and certain persons with disabilities must pay premium for 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 of $278 in 2023 (increase of $4 from 2022).  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 of $506 a month in 2023 (up $7 from 2022).

The Medicare Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital is $1,600 in 2023 (increase of $44 from 2022).  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 2023, beneficiaries must pay a coinsurance amount of $400 per day for the 61^st through 90^th day of a hospitalization (increase of $11 from 2022) in a benefit period and $800 per day for lifetime reserve days (increase of $22 from 2022).  For skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period is $200.00 in 2023 (up $5.50 from 2022).

2023 Medicare Part B Premium and Deductible Amounts

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.  General tax revenues, along with premiums paid by Medicare beneficiaries, fund the Part B program.

There is a special rule for Social Security recipients, called the “hold harmless rule,” that ensures that Social Security benefits will not decline from one year to the next because of an increase in the Medicare Part B premium.  Whether this rule comes into play in any year depends on the amount of Cost of Living Adjustment (COLA) and the Medicare Part B premium increase.  The hold harmless rule applies in 2023 for those people who had been paying the standard Part B premium, and their Medicare Part B premium increased but the Social Security COLA amount was not large enough to cover the increase.  Those who are subject to the 2023 hold harmless rule pay less than the $164.90 standard Part B premium.  All others pay the 2023 not held harmless premium, which is determined based on the Modified Adjusted Gross Income (MAGI) as reported on the individual’s 2021 tax return.

The standard monthly premium for Medicare Part B enrollees is $164.90 for 2023, a decrease of $5.20 from $170.10 in 2022.  In most years (unlike 2023), the Medicare Part B premium rises.  Medicare Part B enrollees will pay the standard $164.90 Part B premium amount in 2023 unless:

• You have Medicare and Medicaid, and Medicaid pays your premiums.  (Your state will pay the standard premium amount.)
• 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.
• You are protected by the "hold harmless" rule discussed above.

Since 2007, a beneficiary’s Part B monthly premium is based on his or her income.  These income-related monthly adjustment amounts affect less than 10 percent of people with Medicare Part B.  The 2023 Part B premiums based on MAGI from the 2021 tax return are shown in the following table:

Beneficiaries who file individual tax returns with income:	Beneficiaries who file joint tax returns with income:	2023 Part B premium not held harmless	Premium level
Less than or equal to $97,000	Less than or equal to $194,000	$164.90	Standard
Greater than $97,000 and less than or equal to $123,000	Greater than $194,000 and less than or equal to $246,000	$230.80	1.4 x standard
Greater than $123,000 and less than or equal to $153,000	Greater than $246,000 and less than or equal to $306,000	$329.70	2.0 x standard
Greater than $153,000 and less than or equal to $183,000	Greater than $306,000 and less than or equal to $366,000	$428.60	2.6 x standard
Greater than $183,000 and less than $500,000	Greater than $366,000 and less than $750,000	$527.50	3.2 x standard
Greater than or equal to $500,000	Greater than or equal to $750,000	$560.50	3.4 x standard

Medicare Part B has an annual deductible of $226 in 2023 (down $7 from 2022), then Medicare beneficiaries are responsible for 20% of the Medicare-approved amount for services.

2023 Medicare Part D Premiums

Since 2011, Medicare beneficiaries’ Part D premiums have been based on income.  In addition to any Part D plan premium, there is an income-related monthly adjustment amount (IRMAA) impacting less than 10% percent of people with Medicare Part D.  Part D premiums vary from plan to plan (note when Part D benefits are included in a Part C Medicare Advantage plan, there may not be any premium).  Roughly two-thirds of beneficiaries pay premiums directly to the plan, while the remaining beneficiaries have their premiums deducted from their Social Security benefit checks.  Regardless of how a beneficiary pays their Part D premium, the Part D income-related monthly adjustment amounts are deducted from Social Security benefit checks or paid directly to Medicare.  The 2023 Part D income-related monthly adjustment amounts for high-income beneficiaries are shown in the following table: 

Beneficiaries who file individual tax returns with income:	Beneficiaries who file joint tax returns with income:	2023 Part D base premium*	IRMAA
Less than or equal to $97,000	Less than or equal to $194,000	Plan premium	$0
Greater than $97,000 and less than or equal to $123,000	Greater than $194,000 and less than or equal to $246,000	Plan premium	$12.20
Greater than $123,000 and less than or equal to $153,000	Greater than $246,000 and less than or equal to $306,000	Plan premium	$31.50
Greater than $153,000 and less than or equal to $183,000	Greater than $306,000 and less than or equal to $366,000	Plan premium	$50.70
Greater than $183,000 and less than $500,000	Greater than $366,000 and less than $750,000	Plan premium	$70.00
Greater than or equal to $500,000	Greater than or equal to $750,000	Plan premium	$76.40

 * Hold harmless rule does not apply to Medicare Part D premiums for prescription drugs.

New for 2023 -- Immunosuppressive drug benefit

If you only have Medicare because of End Stage Renal Disease (ESRD), your Medicare coverage, including immunosuppressive drug coverage, ends 36 months after a successful kidney transplant. Medicare offers a benefit that helps you pay for your immunosuppressive drugs if you don't have certain types of other health coverage (like a group health plan, TRICARE, or Medicaid that covers immunosuppressive drugs).  This new benefit only covers your immunosuppressive drugs and no other items or services.  It isn’t a substitute for full health coverage.  You can sign up for this benefit anytime as long as you had Medicare because of ESRD at the time of your kidney transplant.  To sign up, call Social Security at 1-800-772-1213.  TTY users can call 1-800-325-0788.

Note:  You’ll pay a monthly premium of $97.10 (or higher based on your income) and $226 deductible for this benefit in 2023.  Once you've met the deductible, you'll pay 20% of the Medicare-approved amount for immunosuppressive drugs.  If you have limited income and resources, you may be able to get help from your state to pay for this benefit.

Until next time,

Andrew Herman

CMS Announces 2022 Medicare Parts A & B Premiums and Deductibles

On November 12, the Centers for Medicare & Medicaid Services (CMS) released the 2022 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs, as well as the 2022 Medicare Part D income-related monthly adjustment amounts.

Medicare Part B Deductible Increase

The annual Medicare Part B deductible increases to $233 in 2022, an increase of $30 from the $203 deductible level applicable in 2021.  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.

Medicare Part B Premium Increase

Each year the Medicare Part B premium is set according to the Social Security Act.  The standard monthly premium for most Medicare Part B enrollees will be $170.10 for 2022, an increase of $21.60 from the $148.50 monthly premium applicable in 2021.

According to CMS the nearly 15% increase to the Medicare Part B premium and deductible levels are due to the following factors:

• Rising prices and utilization across the health care system that drive higher premiums year-over-year alongside anticipated increases in the intensity of care provided.

• Congressional action to significantly lower the increase in the 2021 Medicare Part B premium, which resulted in the $3.00 per beneficiary per month increase in the Medicare Part B premium (that would have ended in 2021) being continued through 2025.

• Additional contingency reserves due to the uncertainty regarding the potential use of the Alzheimer’s drug, Aduhelm™, by people with Medicare.  In July 2021, CMS began a National Coverage Determination analysis process to determine whether and how Medicare will cover Aduhelm™ and similar drugs used to treat Alzheimer’s disease.  As that process is still underway, there is uncertainty regarding the coverage and use of such drugs by Medicare beneficiaries in 2022.  While the outcome of the coverage determination is unknown, our projection in no way implies what the coverage determination will be, however, we must plan for the possibility of coverage for this high cost Alzheimer’s drug which could, if covered, result in significantly higher expenditures for the Medicare program.

CMS said the rise in Social Security benefits, which most of the 62 million people on Medicare, who are mostly 65 and older, collect will cover the expenses, as there is expected to be a 5.9% bump in 2022 monthly payments due to cost-of-living adjustment the agency said, the largest in 30 years.

"This significant COLA increase will more than cover the increase in the Medicare Part B monthly premium," CMS said.  "Most people with Medicare will see a significant net increase in Social Security benefits.  For example, a retired worker who currently receives $1,565 per month from Social Security can expect to receive a net increase of $70.40 more per month after the Medicare Part B premium is deducted."

The cost-of-living adjustment goes into effect in January and is estimated to average $71.40 per recipient.

Click here for the November 12th Fact Sheet published by CMS.

Until next time,

Andrew Herman

Federal Long-Term Care WISH Act Introduced in U.S. House of Representatives

Earlier this week, U.S. Representative Thomas Suozzi introduced the WISH Act (H.R. 4289) to create a public catastrophic Long-Term Care Insurance program funded by a new payroll tax.  The acronym stands for "Well-Being Insurance for Seniors to be at Home Act" (click here to read H.R. 4289).

The program is to be financed by a payroll tax of 0.3 percent for workers and 0.3 percent for employers; and it would pay out a monthly cash benefit of about $3,600 (indexed to inflation).  This amount is estimated to pay for about six hours of in-home care daily.  Family members would not be eligible to receive payment; and the individual entitled to the benefit must comply with State and Federal laws relating to minimum wage and withholding of payroll taxes and other employment-related taxes.

The following chart shows how 2021 payroll taxes would be increased by this new program:

Including the proposed Long-Term Care (LTC) Tax, W-2 employees would pay total payroll taxes of 7.95% with self-employed workers paying 15.9% (employee plus employer portion).

The WISH Act conditions benefit eligibility on reaching full Social Security retirement age, and having a severe cognitive impairment or needing assistance in at least two activities of daily living (ADLs).  Full benefits would be paid to those who contributed to the program for at least 10 years (people would be eligible for partial benefits once they paid into the system for six quarters).

The program proposes to pay benefits after an enrollee required a high level of care for a varying amount of time based on a beneficiary’s average indexed earnings.  Those with the lowest incomes could receive benefits after one year; a median income worker would be eligible after twenty months; and the highest income workers would begin to receive benefits after five years.

Funding for the WISH Act is not limited to the LTC Tax noted above.  In addition, there is appropriated to the Federal Long-Term Care Trust Fund out of moneys in the Treasury:  $12,000,000 for program establishment in each of Fiscal Years 2022-2024; and another $50,000,000 for educating the public.

An immediate question that comes to mind is whether it would be allowed to opt out of the federal program, for instance if a taxpayer already owns private Long-Term Care Insurance.  It should be noted that an opt out provision was included in a Washington State program passed into law earlier this year.

The new Washington State Long-Term Care program mandates public Long-Term Care benefits for Washington residents.  The Long-Term Care Act was created to reduce pressure on the Medicaid system and is paid for by 0.58% tax on employee wages.  Under current law, residents have one opportunity to opt out of this tax by having private Long-Term Care Insurance in place by November 1st, 2021.

The WISH Act's sponsor said he is hopeful the program also will have an effect on the private Long-Term Care Insurance market, increasing opportunities for insurance companies and their agents to offer Long-Term Care Insurance to supplement the federal program.  That just may be WISH-ful thinking.

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.

2017 Medicare Parts A, B and D Updates

The official 2017 Medicare and You handbook published by CMS (Centers for Medicare and Medicaid Services) is available in several formats.  Here are links to the English and Spanish versions:

English:  https://www.medicare.gov/pubs/pdf/10050-Medicare-and-You.pdf

Español:  https://www.medicare.gov/pubs/pdf/10050-S-Medicare-and-You.pdf

 

The chart below provides a summary of 2017 Medicare deductibles and co-insurance amounts, along with the Medicare Part B premium and average monthly increase to Social Security benefits:

Medicare Part A
Inpatient hospital deductible and co-insurance		$1,316 deductible for each benefit period
		Days 1 - 60 co-insurance for each benefit period $0
		Days 61 - 90 co-insurance per day for each benefit period $329
		Days 91 and beyond; $658 co-insurance per "each lifetime reserve day"
Skilled Nursing Facility		$0 for days 1 - 20; thereafter, days 21 - 100 $164.50 per day
Part B Premium		2017 standard Part B premium will be $134 (or higher based on your income). However, most people who receive Social Security benefits will pay less than this amount ($109/average)
Part B Deductible		$183.00
Part D		Initial deductible: $400
		Initial coverage limit: $3,700
		Out of pocket threshold: $4,950
		Coverage gap: begins once you reach your Medicare Part D plan's initial coverage limit ($3,700 in 2017) and ends when you spend a total of $4,950 in 2017.
		In 2017, Part D enrollees will receive a 60% 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 10% paid by your Medicare Part D plan will not count toward your TrOOP.
		Minimum cost sharing in Catastrophic portion: 5% or $3.30 for generic or preferred drug that is multi-source drug and the greater of 5% or $8.25 for all other drugs.
Average Monthly Social Security Increase		0.3% increase to $1,360 (from $1,355)

Until next time,

Andrew Herman, President
AH Insurance Services, Inc.