Anyone on Medicare knows that its health insurance comes with significant cost-sharing premiums, deductibles, co-insurance and co-pays, and that these costs change from one year to the next. Following is a review of Medicare costs in 2017.
Medicare Part A
Part A is the hospital benefit of Medicare that covers inpatient hospital care, care in a skilled nursing facility (up to 100 days), some home health care, and hospice services. Most people do not pay a premium for Part A (because they, or their spouse, have paid Medicare taxes while working). In 2017, the Part A hospital deductible is $1,316 per spell of illness. If someone is in the hospital longer than 60 days, their cost sharing will be: $329/day for days 61-90 and $658/day for days 91-150. Beneficiaries in a skilled nursing facility that accepts Medicare pay no cost for Medicare-covered care for the first 20 days. Medicare can cover up to 100 days of skilled nursing facility care, but the beneficiary has a $164.50 per day co-pay for days 21 through 100.
Medicare Part B
Part B is the medical benefit of Medicare covering outpatient care like doctor visits, outpatient hospital services, diagnostic tests, ambulance services, durable medical equipment and mental health services. Everyone on Medicare is subject to a monthly Part B premium. Most people have their Part B premium automatically deducted from their monthly Social Security check. Some people with limited income and resources qualify for Medicaid to pay their Part B premium.
Part B Premium
The amount someone has to pay for Part B in 2017 depends on their situation. People who were on Medicare in 2016 and who have their premium deducted from their Social Security check are either paying $104.90 or $121.80 per month. These premiums have increased slightly in 2017 because of the very small cost-of-living adjustment to Social Security benefits. However, people will see no increase in the amount of Social Security deposited into their accounts this year because that cost of living adjustment is instead being applied to their 2017 Medicare premium.
For people whose Medicare starts in 2017, their monthly premium amount is $134. In addition to these new beneficiaries, the following people will pay a Part B premium of $134 per month in 2017:
Individuals, such as those not collecting Social Security benefits, who pay their Part B premium directly to Medicare rather than have it automatically deducted from their Social Security check.
Those with limited income and resources who qualify for the Medicare Savings Program where Medicaid pays their Part B premium. These people will have to pay the $134 premium amount if Medicaid stops paying their premium at some point during the year.
As in previous years, beneficiaries with annual income above $85,000/single or $170,000/married pay higher Part B premiums. Using the $134 premium amount as a base, these individuals are charged an increased premium on a sliding scale based on the amount of their taxable income.
Other Part B Costs
In addition to their monthly premium, those with Medicare Part B must meet an annual deductible before their coverage starts. The annual deductible for all beneficiaries in 2017 is $183. Once this deductible is met, Part B covers outpatient physical and mental health services at 80 percent.
As a reminder, Medicare beneficiaries are responsible for paying Part A (if any) and Part B monthly premiums regardless of how they get their Medicare (through Original Medicare or a Medicare Advantage plan). Individuals in Original Medicare (who use the red, white and blue card when getting care) with no additional insurance are subject to the Part A and B deductibles and coinsurance described above. Those in a Medicare Advantage plan can be charged the Part A and B costs set by their particular plan.
Medicare Part D
Part D is the prescription drug benefit of Medicare that covers medications beneficiaries get through a pharmacy. These are the costs for a standard Part D plan in 2017:
• The plan’s monthly premium (varies from plan to plan);
• An annual deductible of $400;
• During the initial coverage period, a 25 percent co-pay for each covered prescription until the person’s total drug costs reach $3,700;
• During the coverage gap (often referred to as the “doughnut hole”), a percentage of the costs of their drugs (40 percent of the cost of brand-name drugs and 51 percent of the cost of generics plus a small dispensing fee) until the consumer’s total out-of-pocket expenses reach $4,950; and
• During the catastrophic coverage period, a co-pay of $3.30 for generics and $8.25 for brand name drugs, or a five percent co-pay, whichever is greater, for the rest of the year.
Part D Costs for Those Receiving Extra Help from Medicare
People with limited income and resources may qualify for Extra Help from Medicare that helps pay their Part D costs. Some beneficiaries receive Full Extra Help while others get Partial Extra Help. Anyone who qualifies for the Full Extra Help from Medicare has the following Part D costs in 2017:
• $0 premium (as long as he is enrolled in one of the nine stand-alone drug plans available in 2017 that provide standard benefits and charge a premium below the Extra Help Benchmark amount of $39.45)
• Small co-pays for their prescription medications:
2 $1.20/generics and $3.70/ brand names (if income is less than 100 percent Federal Poverty Level) or
2 $3.30/generics and $8.25/ brand names (if income above 100 percent Federal Poverty Level) or
• $0 if someone is on Medicare and receiving Medicaid long-term care services in a nursing home or through a Home and Community-Based Services Waiver program
Those beneficiaries who qualify for Partial Extra Help in 2017 will pay the following costs:
• A portion of their Part D plan monthly premium depending on the amount of their Extra Help;
• A deductible no higher than $82;
• 15 percent co-pays on all of their medications until they reach total out-of-pocket expenses of $4,950;
• During the catastrophic coverage period, co-pays of $3.30/generics and $8.25 /name brands for the rest of the year
Remember: a Medicare beneficiary who receives any amount of Extra Help from Medicare has no coverage gap (doughnut hole), no matter what Part D plan he or she joins.
Anyone interested in finding out if they qualify for help with their Medicare costs can contact the APPRISE program at (800) 783-7067.
This article was written by the PA Health Law Project, which provides free legal help to low-income seniors. Call PHLP at (800) 274-3258 or visit phlp.org.