Medicare Advantage

Medicare Deductible – 2018

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Updated October 9, 2017

If you’re a Medicare beneficiary, then you’re in good company. This social insurance program is utilized by 58 million Americans, including men and women 65 years and older, as well as individuals under 65 with permanent disabilities, end-stage renal disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS, Lou Gehrig’s disease).

With such a large membership pool, Medicare spending can take a huge financial toll on the U.S. healthcare system. The Centers for Medicare & Medicaid Services (CMS) projected that total Medicare spending in 2016 would reach $672.6 billion. Kaiser Family Foundation reported that spending topped $675 billion last year, representing about 15 percent of the total federal budget.

Regardless of which figure is correct, it’s clear that Medicare spending accounts for a good portion of total U.S. healthcare spending, and it’s on the rise. Exhaustive measures were taken in 2016 to control and reduce Medicare deductibles, premiums, copays and other costs. Not only does this ensure that millions of Medicare beneficiaries’ vital healthcare needs and services are protected, but it helps to keep the government’s healthcare spending under control. Indeed, enrollees saw very small 2016 Medicare deductible increases, compared to 2015 plan prices, including those for Part A, Part B and Part D. Beneficiaries will pay the following deductibles in 2017:

  • For Part A, the deductible is $1,316 for each benefit period, compared to $1,288 in 2016.
  • For Part B, the deductible is $183 per year, compared to $166 in 2016.
  • For Part C (Medicare Advantage), which is private insurance, deductibles vary by plan.
  • For Part D, again, the deductible varies by plan. However, no PDP may have a 2017 Medicare deductible of more $400, compared to $360 in 2016. Some plans even have no deductible at all.

Medicare deductibles for 2018 are not completely finalized and may still change depending in part on the cost-of-living adjustment (COLA). But while there are increases for enrollees’ Medicare costs, they are still smaller than they could have been.

It’s projected that that average base premium for Medicare Part D will be $33.50 in 2018, a decrease over 2017. The Part D annual deductible will increase by $5 to $405 in 2018. Income brackets will also change in 2018, leading Medicare enrollees in the highest income tiers with higher costs next year as well.

For the last two years, the Medicare Trustees predicted that 30 percent of all Part B members could face a significant price increase in their 2016 or 2017 Medicare deductible and premium amounts due to three factors: past years’ Medicare-related debt; reservation of funds for future years’ coverage; and the lack of a cost-of-living adjustment (COLA) for Social Security benefits.

However, Congress passed the Bipartisan Budget Act of 2015 (Public Law 114-74) into law on November 2, 2015. The result was that these enrollees only had a 16 percent increase in their 2016 Part B premiums and deductibles; $121.80, compared to $104.90 in 2015. Most beneficiaries will pay the lower amount, which averages to about $109 a month in 2017. For new Part B enrollees, the premium in 2017 is $134 a month if you earn up to $85,000 as a single tax filer.

The Medicare Trustees Report, dated June 22, 2016, was released last year and offered insights into Medicare cost changes for the 2016-2017 season.

Breaking Down the Deductibles for Each Part

A deductible is the amount of money Medicare beneficiaries have to pay for healthcare or prescriptions before the plan pays its share. After you meet the deductible, your plan begins to pay. But as to what you’re actually paying for your 2018 Medicare deductibles, and why, the following will help to illustrate what each portion covers and the costs associated with each.

Part A and Part B are together known as original Medicare. Research shows that fewer than 25 percent of all beneficiaries need Part A coverage. But this portion actually costs Medicare a little more than other parts, with most costs due to hospital charges. As of June 2017, nearly 38 million people are enrolled in original Medicare while an additional 20 million have chosen Medicare Advantage plans.

Medicare Part A

This portion of Medicare covers hospital insurance, and it includes: inpatient hospital stays; skilled nursing facilities (SNFs), with necessary staff and equipment; rehabilitative services (which help to keep, get back or improve skills and functioning for daily living) and other related health services; and hospice coverage.

For most beneficiaries, Part A has no monthly premium cost, as they’ve already paid through lifelong payroll deductions. But you still need to pay the deductible before Medicare kicks in. In 2017, per benefit period, the deductible for Part A is $1,316; in 2016, it was $1,288. Generally, enrollees are billed on a quarterly basis, and payments can be made by check, credit card or checking account deduction. The annual deductible for Part A in 2018 has not been released.

Enrollees who didn’t work and pay payroll taxes – or their spouses – have to pay for Medicare Part A. Their costs include the 2017 Medicare deductible; the monthly premium; the out-of-pocket maximum, which is the most you’ll pay during the benefit period (usually a year); coinsurance; payment for services after deductibles; and any prescription drugs.

Medicare Part B

Medicare Part B is used by most beneficiaries, most often for doctors’ visits. Part B provides medical insurance, including those services and supplies considered medically necessary, which are considered essential for the prevention, diagnosis or treatment of various conditions, illnesses, injuries or diseases and their symptoms. These services and supplies must also meet accepted medical standards. But Part B also applies to preventive services and supplies, those required to prevent or detect illness at an early stage when treatments are most likely to work.

Among the many services and benefits provided to Medicare Part B enrollees are annual wellness visits and an initial “Welcome to Medicare” preventive visit. Members also qualify for countless other services and benefits, including:

  • Blood work
  • Doctor visits
  • General nursing
  • Home healthcare
  • Occupational, physical and speech therapies
  • Prescription drugs
  • Screenings (for things like alcoholism, cardiovascular disease, cancer, depression, diabetes, HIV, obesity and sexually transmitted infections)
  • Shots (e.g., flu, hepatitis B and pneumonia)
  • Surgeries
  • Testing

The 2017 Medicare deductible for Part B is $183, which covers the whole year; in 2016, it was $166. Once the deductible is met, you can expect to pay 20 percent of the Medicare-approved amount for most doctor services. Within original Medicare, this is the amount that can be paid to a doctor or supplier. These healthcare providers must accept assignment, which is the agreement between doctors and Medicare to accept payment with no additional costs for beneficiaries. Medicare rates for 2018 have not been released.

The Medicare-approved amount may include costs for being a hospital inpatient as well as outpatient therapy. It also covers durable medical equipment (DME), which is for home use, long-lasting, doctor-prescribed and considered medically necessary. Medicare Part B also covers physical and occupational therapy, as well as speech language pathology services. However, there may be limits in 2018 for the amounts covered for these services.

Medicare Part C

Also known as Medicare Advantage, Part C refers to private insurance plans rather than original Medicare. As such, 2018 Medicare deductibles for Part C vary by plan. Copayments, coinsurance rates and other costs for Medicare Advantage plans in 2018 will also vary. Typically, each plan has an out-of-pocket limit, as well as a copayment (copay) of $10 or $20 for each service. The copay is the amount you must pay for your share of the cost for a medical service or supply.

Medicare Part D

Medicare Part D refers to prescription drug plans (PDPs), which add drug coverage to original Medicare. With the way it’s structured, no PDP may have a deductible more than $400 in 2017; in 2016, it was $360. In 2018, the max deductible will increase to $405. While there is a cap in place that’s set by the government, some drug plans have no deductible at all.

You don’t have to enroll in a Part D plan for drug coverage. Beneficiaries may also be able to obtain drug coverage by selecting a Medicare Advantage plan with prescription drug coverage (MAPD). You must have already enrolled in original Medicare to join an MAPD, though. Instead of either option, you can purchase another insurance policy offering prescription drug coverage.

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