The Centers for Medicare and Medicaid Services (CMS) released updated figures for original Medicare (Parts A and B) this week, including premium costs, deductibles and coinsurance amounts for those enrolled. New Original Medicare customers and those who aren’t receiving Social Security benefits in 2018 can expect slight increases across the board, but the biggest changes will hit Part B enrollees who have been protected by the “hold harmless” provision of Social Security. That provision has kept Part B beneficiaries protected from price increases for several years. This year, the Social Security cost-of-living adjustment (COLA) is 2 percent, which will force most of those being held harmless to pay a higher Part B premium. Medicare Part A enrollees will also face higher rates in 2018.
Part A Costs
If you have fewer than 40 work credits (30 to 39), then you’ll likely pay a reduced premium rate of $232 a month in 2018 for Part A coverage, representing a $5 increase over last year. For those with fewer than 30 work credits, the full Part A premium will increase by $9 to $422 a month next year. Benefit costs will also increase in 2018:
- Deductible for inpatient hospital stays: $1,340
- Daily coinsurance rate for days 61 to 90 in a hospital: $335
- Daily coinsurance rate for lifetime reserve days after day 90: $670
- Coinsurance rate for stays in a skilled nursing facility (days 21 to 100): $167.50
The CMS noted that about 99 percent of Part A enrollees don’t have the pay a monthly premium for coverage since they’ve earned enough credits through work to qualify for premium-free Part A. Some beneficiaries, such as those who haven’t earned enough work credits or those with certain disabilities, must buy into the program voluntarily.
Part B Costs
There are a couple notable changes to Part B costs in 2018. Part B covers outpatient care, doctor’s visits and other services related to medically necessary treatments. Premiums will increase by about 23 percent for most enrollees because most enrollees were previously protected from premium hikes by the hold harmless provision of Social Security. They’re still protected under that provision, but since the COLA was enough to justify higher rates this year, most people in Part B in 2018 will pay the standard amount of $134 a month for coverage. This is the same as last year, so those who weren’t protected under the hold harmless clause will continue paying the same premium they did last year.
People whose COLA isn’t enough to cover the increase in Part B premiums will pay less than the standard amount. The CMS reported that about 28 percent of hold harmless customers will pay less than $134 a month. For higher-income Part B enrollees, the income-related monthly adjustment amounts (IRMAA), a surcharge applied to premiums for those who earn more money, will change in 2018 as follows:
|If you earned (single tax filing):||If you earned (joint tax filing):||You’ll pay:|
|Up to $85,000||Up to $170,000||$134 a month|
|Over $85,000 to $107,000||Over $170,000 to $214,000||$187.50 a month|
|Over $107,000 to $133,500||Over $214,000 to $267,000||$267.90 a month|
|Over $133,500 to $160,000||Over $267,000 to $320,000||$348.30 a month|
|Over $160,000||Over $320,000||$428.60 a month|
The IRMAA brackets have been updated for 2018 to include an additional mid-tier category but a lower threshold for the maximum surcharge. If you fall into one of these income levels, you’ll pay more for Part B. According to the CMS, these surcharges affect just 5 percent of Medicare Part B beneficiaries. The annual deductible for Part B remains unchanged from last year at $183.