Shedding Light on Medicare Part D – Why pharmacy copays may not match to published plan copays; and why actual out-of-pocket differs from the Medicare TrOOP (True Out-Of-Pocket)

Medicare’s prescription drug benefit is known as Part D and is provided by private insurers.  Medicare Part D was signed into law as part of the Medicare Prescription Drug Improvement and Modernization Act of 2003; and it can be purchased stand-alone or integrated with a Medicare Advantage plan (also known as Medicare Part C).  Medicare Part D has distinct coverage phases, including a Coverage Gap (or “Donut Hole”) that has been vastly improved for consumers under more recent legislation.

As of 2020, enrollees with Standard Part D coverage and in the Donut Hole pay 25% of the cost of their drugs until they reach the Catastrophic Coverage phase (as opposed to paying the full cost while in the Donut Hole, which had been the case before the Affordable Care Act started closing the gap).

For background, Medicare Part D plans may impose an Initial Deductible up to $445 in 2021 (an increase of $10 from 2020).  The deductible is the amount you must pay before the plan begins to share in costs.  Some plans (generally with higher monthly premiums) do not impose any deductible; and it is common for Part D plans to feature a plan deductible, but only apply it to medicines classified in the plan’s higher Drug Tiers (Part D plan sponsors typically assign medicines into five Tier levels).

Once the Initial Deductible is met, consumers are charged copays or coinsurance as published in each Part D plan’s Summary of Benefits.  Copay amounts may vary based on the plan’s pharmacy network (preferred vs. standard, or mail order service), as well as Drug Tier level.  Consumers sometimes inquire, why doesn’t my copay at the pharmacy match to the amount shown in my plan’s Summary of Benefits document?  Answer:  If the pharmacy drug cost is lower, you pay the lower amount.

The standard Medicare Part D plan structure also includes an element called the Initial Coverage Limit, or ICL, which is $4,130 in 2021 (an increase of $110 from the 2020 ICL of $4,020).  The ICL marks the point where you enter the Donut Hole.  More specifically, you enter the Donut Hole when the total negotiated retail value of your covered annual prescription drugs exceeds your plan’s ICL.  At the inception of the Medicare Part D program, consumers generally bore all costs in the Donut Hole.

So, will you enter the 2021 Donut Hole?

If your prescribed medications for 2021 have a retail value exceeding $350/month, you are likely to enter the Donut Hole during 2021.  Generally, less than one-quarter of Medicare beneficiaries with Part D coverage enter the Donut Hole each year.  Consumers sometimes avoid entering it by seeking out lower cost options (such as pharmacy coupons) instead of using their plan for certain drugs.

If you reach the Donut Hole phase of your 2021 Part D coverage, the drug discount is 75%.

While in the Donut Hole, generic formulary drug costs are 25% of your plan's negotiated retail prices.  For example, if you are in the 2021 Donut Hole and your generic medication has a retail cost of $100, the Standard Part D plan benefit requires you to pay $25 for a refill.  And the $25 that you spend for a covered formulary drug counts toward your 2021 out-of-pocket limit (or TrOOP, explained below).

While in the Donut Hole, the 2021 brand-name drug discount also is 75%, meaning that you pay 25% of your plan’s negotiated brand drug retail costs.  The pharmaceutical industry pays for 70% of the cost of these medications in the Donut Hole; and you receive credit for 95% of the retail drug cost toward meeting your 2021 TrOOP (the 25% of retail costs you pay plus the 70% drug manufacturer discount).

For example, if you reach the 2021 Donut Hole and purchase a brand name medication with a retail cost of $100, you will pay $25 for the formulary medication, and receive $95 credit toward meeting your 2021 TrOOP (which is the Donut Hole exit point).

So, what exactly is “TrOOP” and is it the same as my actual out-of-pocket drug costs?

There is not a short answer to this question, so please read on!

TrOOP is the Medicare Part D program’s annual "Total out-of-pocket costs" and is known as "True out-of-pocket costs".

In general, TrOOP includes all payments for medications listed on your Part D plan's formulary and purchased through a preferred or standard network pharmacy.  Both the payments you make, and payments that Pharma companies make on your behalf, count towards TrOOP.  If you switch Medicare Part D plans during a plan year, your TrOOP will be transferred to your new plan (it travels with you).

TrOOP is important because after it reaches $6,550 in 2021 (an increase of $200 from the 2020 level), you move to the final state of your Medicare Part D coverage, known as Catastrophic Coverage.  In the Catastrophic Coverage stage, your medication costs are reduced to $3.70 for generics or $9.20 for brand-name drugs (or 5% of the drug cost - whichever is greater).

The components of TrOOP are as follows:  it includes the amount of your Initial Deductible (if any) and your co-payments or co-insurance during the ICL phase; and as noted above it includes what you pay and a portion of what the Pharma companies pay while you are in the Donut Hole (of the 75% Donut Hole discount on brand-name drugs, 70% of that counts towards TrOOP as that portion is paid by the drug manufacturer). The additional 5% Donut Hole discount on brand-name drugs and the 75% Donut Hole discount on generics do not count toward TrOOP, as they are paid by your Medicare Part D plan.

TrOOP also includes payments made for your drugs by any of the following programs or organizations: "Extra Help" from Medicare; Indian Health Service; AIDS drug assistance programs; most charities; and most State Pharmaceutical Assistance Programs (SPAPs).

TrOOP does not include monthly premiums or non-formulary drug purchases.

Because TrOOP includes the lion’s share of what drug manufacturer’s pay on your behalf for brand-name drugs while in the Donut Hole, your actual out-of-pocket costs at time of Donut Hole exit likely will be much lower.

Will you exit the Donut Hole and enter the 2021 Catastrophic Coverage phase?

Based on CMS drug cost estimates, if your monthly retail formulary drug costs approach $850, you are likely to exit the 2021 Donut Hole and enter Catastrophic Coverage.

Medicare Part D plan sponsors can offer the Standard Part D plan design, or a design under which the measured actuarial value equals or exceeds the actuarial value of Standard Part D coverage.  Actuarial equivalence is a required test to confirm that expected paid claims under the plan sponsor's prescription drug coverage are at least as much as expected paid claims under the standard design.  Plans sponsors with multiple benefit options must apply the actuarial value test for each option.

Until next time,

Andrew Herman

2021 Medicare Part B Premiums Increase by $3.90/Month

On November 6th, The Centers for Medicare & Medicaid Services (CMS) announced the 2021 monthly Medicare Parts A and B premiums, deductibles, and coinsurance amounts.

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 increase from $144.60 in 2020 to $148.50 in 2021, an increase of $3.90 per month.  Recent legislation signed by President Donald Trump significantly dampens the 2021 Medicare Part B premium increase that would have occurred given the estimated growth in Medicare spending next year. According to CMS, Medicare spending is estimated to grow due to people seeking care they may have delayed during the COVID-19 public health emergency, availability of more COVID-19 treatments, and availability of COVID-19 vaccines.

CMS also announced that the annual deductible for Medicare Part B enrollees will increase from $198 in 2020 to $203 in 2021, an increase of $5.  The additional $5 in 2021 will be borne by enrollees as an out-of-pocket expense under all Medicare Supplement Insurance plans (also known as 'Medigap') available to newly eligible Medicare beneficiaries.

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 pay a Part A premium since they have at least 40 quarters of Medicare-covered employment.

The Medicare Part A inpatient deductible that beneficiaries will pay when admitted to the hospital is $1,484 in 2021, an increase of $76 from $1,408 in 2020. Medigap plans automatically adjust benefits in 2021 so that the higher inpatient deductible is covered.

Medicare Annual Election Period (10/15 - 12/7)

Medicare beneficiaries can choose to enroll in fee-for-service Original Medicare (Parts A and B) or can select a private Medicare Advantage plan to receive their Medicare benefits. Premiums and deductibles for Medicare Advantage and Medicare Prescription Drug plans (Medicare Part D) are already finalized and are unaffected by this announcement.

During the ongoing Medicare Annual Election Period, which began on October 15th and ends on December 7th, Medicare beneficiaries can compare coverage options like Original Medicare (Part A and Part B) and Medicare Advantage, and choose health and prescription drug plans for 2021. Medicare health and drug plan costs and covered benefits can change from year-to-year. Over the past three years, CMS has redesigned its useful Medicare Plan Finder so that Medicare beneficiaries may:

• Compare pricing between Original Medicare, Medicare Advantage plans, Medicare prescription drug plans (Medicare Part D), and Medigap policies;
• Compare coverage options on their smartphones and tablets;
• Compare up to three Medicare Part D drug plans or three Medicare Advantage plans side-by-side;
• Get plan costs and benefits, including which Medicare Advantage plans offer extra benefits;
• Build a personal drug list and find Medicare Part D prescription drug coverage that best meets their needs.

Highlights for 2021 Open Enrollment include:

• A 34 percent decrease in average monthly premiums for Medicare Advantage plans since 2017.
• More than 4,800 Medicare Advantage plans are offered for 2021, nearly double the offerings in 2017. Similarly, more Medicare Part D plans are available, and the average basic Part D premium has dropped 12 percent since 2017. 
• Medicare beneficiaries can join a prescription drug plan that will offer many types of insulin at a maximum copayment of $35 for a 30-day supply. More than 1,600 Medicare Advantage and Part D prescription drug plans are participating in the Part D Senior Savings Model for 2021. People who enroll in a participating plan could save up to an estimated $446 a year in out-of-pocket costs on insulin. CMS has added a new “Insulin Savings” filter on Medicare Plan Finder to display plans that will offer the capped out-of-pocket costs for insulin. Beneficiaries can use the Medicare Plan Finder to view plan options and look for a participating plan in their area that covers their insulin at no more than a $35 monthly copay.

At AH Insurance Services Inc., we are available to make it easy for Medicare Beneficiaries to learn more about 2021 plan options.  We can help you determine whether a Medicare Advantage plan -- or a Medigap policy plus a Part D plan -- will be most suitable to meet your medical needs.  Additionally, we can assist in projecting your 2021 out-of-pocket drug costs based on your current medicine list and preferred pharmacy.  There is no obligation to buy.

Contact us at (850) 450-3622 or info@ahinsuranceservices.com.

Until next time,

Andrew Herman

President, AH Insurance Services, Inc.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)

Changes to Medicare Supplement policies (also known as Medigap) go into effect on January 1, 2020, nearly five years after the bipartisan legislation known as MACRA was signed into law.

In addition to creating a Quality Payment Program and removing Social Security numbers from government-issued Medicare cards, MACRA authorized the following changes to Medigap:

• Medigap plans are prohibited from providing first dollar coverage of the Medicare Part B deductible for newly eligible Medicare beneficiaries on or after January 1, 2020.  Since Medigap Plans C and F traditionally have included coverage for 100% of the Medicare Part B deductible, these two plans no longer will be available to newly eligible beneficiaries.

• Newly eligible beneficiaries who will not be able to purchase Medigap Plans C and F include those turning age 65 on or after January 1, 2020 and anyone gaining eligibility for Medicare benefits due to disability or End-Stage Renal Disease on or after January 1, 2020.

• Plans C and F are NOT being discontinued.  Medicare beneficiaries currently enrolled in either Plan C or Plan F will retain access to their plan; additionally, all beneficiaries who became eligible for Medicare prior to January 1, 2020 still have the option to purchase either plan.

• For newly eligible beneficiaries, Plans D and G are available and feature similar health benefits to Plans C and F except for 100% payment of the Medicare Part B Deductible.

• Medigap Plan G will now have a “High Deductible” option, since Medigap Plan F has a High Deductible coverage option and can no longer be purchased by newly eligible Medicare beneficiaries.  Under the new Plan G High Deductible option, the Medicare Part B deductible is paid by the Medicare beneficiary and counts toward the plan's deductible amount.

Until next time,

Andrew Herman, President

AH Insurance Services, Inc.

2020 Medicare Part B Premium and Deductible Amounts

The 2020 premium levels and deductible for Medicare Part B, which covers medically-necessary services including doctors' services and tests, outpatient care, home health services and durable medical equipment, have been published by the Centers for Medicare and Medicaid Services (CMS).

Medicare Part B Premium Levels

For most Medicare Beneficiaries, the premium due for Medicare Part B in 2020 will be $144.60 per month.  This amount is up $9.10 per month from 2019's $135.50 standard amount.

Beneficiaries with higher than standard annual income have to pay more for their monthly Part B premiums.  The table below illustrates how some Beneficiaries will owe as much as $491.60 in monthly premiums in 2020, based on income as reported on their federal tax return for 2018:

For individuals with this income:	Or joint filers with this income:		Monthly premium:
$87,000 to $109,000		$174,000 to $218,000	$202.40
$109,000 to $136,000		$218,000 to $272,000	$289.20
$136,000 to $163,000		$272,000 to $326,000	$376.00
$163,000 to $500,000		$326,000 to $750,000	$462.70
Over $500,000		Over $750,000	$491.60

Medicare Part B Deductible

The Medicare Part B deductible is subject to change each year, and reflects the up-front amount that must be paid in a calendar year under the Original Medicare program before 80/20 co-insurance applies.  In 2020, the Medicare Part B deductible will be $198, an increase of $13 from this year's $185 Part B deductible.  Medicare Beneficiaries enrolled in Medicare Advantage HMOs and PPOs (Part C of Medicare) typically do not pay the Medicare Part B deductible directly; rather Part C plan members pay co-pays and other out-of-pocket costs according to the specific terms of the plan.

Until next time,

Andrew Herman
President, AH Insurance Services Inc.

Pineapple Placements – Gulf Coast Business Providing FREE Senior Living Referrals

We are pleased to recommend Pineapple Placements, a trusted local Senior Living Referral Company for Independent Living, Assisted Living, Alzheimer’s/Dementia Care, Rehab Services, Skilled Nursing Care, Home Health, Hospice and much more.  Complimentary services available include:

- Comprehensive Assessment
- Educational meetings to explore senior living options
- Guided tours of local communities
- Helping family members implement the best senior living arrangement for their loved ones

I’ve had the pleasure of meeting with Amber Geier, Senior Living Specialist and President of Pineapple Placements, LLC.  She shared her experience of having to place her own loved ones, and how that helped her understand how changing care needs can burden seniors and their family members.  In 2018, Amber opened Pineapple Placements with the goal of helping people with effortless transitions.  While many clients contact Amber in crisis-management mode, there is no need to wait for that as she is happy to advise families as they plan ahead for future living needs.

If you need senior living advice or placement, help is on the way!  Call Amber at 727.360.3715, email to info@pineappleplacements.com or visit https://www.pineappleplacements.com.

Until next time,

Andrew Herman, President
AH Insurance Services, Inc.

CMS Releases National Health Expenditures Projections for 2018-2027

Health spending to GDP is expected to increase from 17.9% in 2017 to 19.4% in 2027, as recently announced by the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary.  Actual ratios likely are higher than reported since official National Health Expenditures (NHEs) may not include all health spending such as non-prescription vitamins, supplements, Yoga classes, and other health-related expenditures generally not covered under government or private insurance programs.

According to CMS, from 2018 to 2027:

• Total national health spending is projected to grow at an average annual rate of 5.5 percent,
reaching nearly $6.0 trillion by 2027.

• Health spending is projected to grow at a rate of 0.8 percent faster than Gross Domestic
Product (GDP) per year, and the health share of GDP is expected to increase from 17.9 percent
in 2017 to 19.4 percent by 2027.

• Prices for health care goods and services are projected to increase at a rate of 2.5 percent,
compared to 1.1 percent for 2014-2017.

• Average annual spending in Medicare is expected to grow 7.4 percent due to projected
enrollment growth. In comparison, average annual spending in Medicaid is expected to grow at
a rate of 5.5 percent, and in private health insurance at a rate of 4.8 percent.

• The share of health care spending sponsored by federal, state, and local governments is
expected to increase by 2 percent, reaching 47 percent by 2027. This projected increase is
primarily due to expected growth in Medicare enrollment.

• The share of individuals with health insurance coverage is expected to remain stable, at around
90 percent.

The Office of the Actuary in the Centers for Medicare & Medicaid Services annually produces projections of health care spending for categories within the National Health Expenditure Accounts, which track health spending by source of funds (for example, private health insurance, Medicare, Medicaid), by type of service (hospital, physician, prescription drugs, etc.), and by sponsor (businesses, households, governments).

Click on this web page to retrieve the official 2018-2027 NHE Projections.

Until next time,

Andrew Herman, President
AH Insurance Services, Inc.

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.

2018 Medicare ID Card Changes

New Medicare ID Cards To Be Issued Next Year

Beginning in April 2018, new Medicare cards without Social Security numbers will be sent to beneficiaries.  Instead of the Social Security-based Health Insurance Claim Number (HICN), the new cards will use a unique, randomly assigned combination of letters and digits that will be known as the Medicare Beneficiary Identifier (MBI).

How Will The MBI Look?

The MBI will be:

• Clearly different from the HICN number
• 11-characters in length
• Made up only of numbers and uppercase letters (no special characters) 

The Centers for Medicare and Medicaid Services (CMS) has promised an easy transition for Medicare providers.  Through December 2019, providers will be allowed to use either the MBI or the old HICN.

How Will The Process Work?

Currently there are nearly 60 million people enrolled in the Medicare program, so it is no small task to develop a new Medicare identifier and issue new cards to all Medicare beneficiaries; but a 2015 law passed by Congress (The Medicare Access and CHIP Reauthorization Act) gave CMS four years to accomplish it.

The first step will be to implement the new identification number and new Medicare card with the non-Social Security number identifier for new enrollees.  From there, CMS must issue a new Medicare card to every current enrollee by April 2019.

The new Medicare card will work exactly like the old one, but will safeguard private information of interest to identity thieves.  If you are currently enrolled in Medicare, you’ll receive information directly from CMS about when to expect your new Medicare card.

For more information about the new Medicare ID card, please see:

https://www.cms.gov/Medicare/New-Medicare-Card/index.html

Until next time,

Andrew Herman, President
AH Insurance Services, Inc.