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2014 Medicare Premiums and Deductibles

What are Medicare premiums and deductibles?

This article discusses Medicare premiums and deductibles that were in effect during 2014. You can see the premiums and deductibles in effect for Medicare plans in 2015.

A premium is the monthly amount you pay for your Medicare coverage or Medicare insurance plan. Premium amounts can change each year. The Centers for Medicare & Medicaid Services (CMS) will generally publish the Medicare Part A and Part B rate changes for the following calendar year around the middle of October or November. New premium rates for Medicare Part D and Medicare Advantage plans become available starting October 1, when sponsors are allowed to start marketing their plans.

A deductible is the amount you must pay for health costs before Medicare begins to pay its share.

Medicare Part A premiums

Most beneficiaries do not pay a monthly premium for Medicare Part A coverage if they or their spouse paid Medicare taxes while working. You won’t have to pay a premium if you’ve worked at least 10 years (or 40 quarters) of Medicare-covered employment.

The small percentage of people who do have to pay Medicare premiums will pay up to $426 in 2014 each month. The monthly amount depends on the number of quarters of Medicare-covered employment the person (or his/her spouse) has:

  • People with 30 to 39 quarters of Medicare-covered employment pay a monthly premium of $234 in 2014.
  • Those with less than 30 quarters of Medicare-covered employment and who are not eligible for free or reduced Medicare premiums for any other reason pay a monthly premium of $426 in 2014.
  • Premium amounts may change for the next year. CMS generally announces rate changes for the following calendar year around the middle of October each year.


Medicare Part B premiums

The Medicare Part B premium is set each year at a level calculated to pay for 25 percent of the average cost of coverage. Most people pay the standard premium amount if their annual household income doesn’t exceed a set threshold amount. For 2014, the standard Medicare Part B premium is $104.90, and the threshold is $85,000 for single filers or married couples who file separately and $170,000 for couples who file jointly, based on 2012 tax returns.

Although most beneficiaries pay the standard rate, your Medicare Part B premium rate may be different if the following situations apply:

  • There is a late enrollment penalty premium surcharge for beneficiaries who enroll in Medicare Part B after their Initial Enrollment Period and don’t have other health coverage, such as through an employer-sponsored group plan. This penalty is a 10% higher premium for every full 12-month period you were eligible, but didn’t enroll in Medicare Part B.
  • There are higher “income-related” premiums for those whose annual income exceeds the threshold amount.


2014 Medicare Part B income-related premium amounts

If Your Annual Income Is Percent of Cost Covered Actual 2014 Premium
Individual Tax Return Joint Tax Return
$85,000 or less $170,000 or less 25% $104.90
$85,001 – $107,000 $170,001 – $214,000 35% $146.90
$107,001 – $160,000 $214,001 – $320,000 50% $209.80
$160,001 – $213,000 $320,001 – $426,000 65% $272.70
Over $213,000 Over $426,000 80% $335.70


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Medicare Part D premiums

Medicare Part D plans often charge a monthly premium for coverage. Since they plans are offered through private insurers, premiums vary by plan.

As of 2011, beneficiaries with higher incomes must pay a premium adjustment based on their income. This premium adjustment is called the Income-Related Monthly Adjustment Amount (IRMAA), and is paid directly to the federal government, not your Medicare Part D plan. It is deducted from your Social Security, Railroad Retirement Board, or Office of Personnel Management benefits).

Medicare Part A deductible and coinsurance

Medicare Part A pays all covered hospital, skilled nursing facility and home health care services for each benefit period except for the deductible. For 2014, this deductible is $1,216 per benefit period, and the overall cost for coinsurance will range based on the length of your inpatient hospital stay:

  • 1-60 days: $0 per benefit period
  • 61-90: $304 per day of each benefit period
  • 91 and beyond: $608 for each lifetime reserve day*

*You’re covered for up to 60 lifetime reserve days that can be used over your lifetime. Once lifetime reserve days are used up, you pay all costs.

For people on Medicare who receive care in a skilled nursing facility, Medicare will cover days 1 through 20 in full. In 2014, there is a coinsurance of $152 per day for days 21 through 100 of each benefit period, and no coverage after day 100 in a benefit period.

Medicare Part B deductible

Medicare Part B includes a yearly deductible of $147 in 2014. This deductible will be applied to health care costs like physician services, outpatient hospital services, certain home health services and durable medical equipment. Once the deductible is met, Medicare will begin to cover its share.

Medicare Part D deductible

The annual deductible for the standard Medicare Part D benefit is $310 in 2014, which is a decrease of $10 from the 2013 deductible.

As you can see, premiums and deductibles can vary depending on the Medicare plans you select; and many costs have changed for Medicare plans in 2015. Would you like to ask me other questions? Learn more about me by clicking the orange button below my photo. There are also links below that let you schedule a phone appointment or have me email you more information. Want to compare plans on your own? Use the blue Find Your Plan button on the right side of this page. Or, for personalized assistance, just call us at 1-844-847-2659 (or TTY users, call 711).

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