Medicare Premiums and Deductibles for 2017
This article was updated on: 04/13/2017
As a Medicare beneficiary, you may need to pay certain out-of-pocket costs, such as premiums, deductibles, copayments and/or coinsurance. These costs are generally standardized for covered services under Original Medicare, Part A and Part B. If you’re enrolled in a Medicare Advantage plan or Medicare Part D Prescription Drug Plan, your out-of-pocket costs may vary by plan.
A premium is the monthly amount you pay for your Medicare coverage or Medicare insurance plan. A deductible is the amount you must pay out-of-pocket each year before your Medicare plan begins sharing costs with you. (Your other out-of-pocket costs may include coinsurance and copayments.)
Premium and deductible amounts may change each year. The Centers for Medicare & Medicaid Services (CMS) usually publishes the Medicare Part A and Medicare Part B rates for the following plan year around the middle of October or November. Medicare-approved private insurance companies publish the new stand-alone Medicare Part D Prescription Drug Plan and Medicare Advantage plan premium and deductible rates for the following year during the fall. If you’re already enrolled in a Medicare Prescription Drug Plan or a Medicare Advantage plan, the plan sends you a document called an Annual Notice of Change.
Medicare Part A premiums
Most beneficiaries over age 65 don’t pay a monthly premium for Medicare Part A coverage if they or their spouse paid Medicare taxes for at least 10 years (or 40 quarters) while working. In fact, according to CMS, most Medicare beneficiaries do not have to pay Medicare premiums on Part A because of their employment Medicare tax history. If you don’t qualify for premium-free Medicare Part A, you may have to pay up to $413 each month.
Medicare Part A deductible and coinsurance
Medicare Part A helps cover hospital, skilled-nursing facility, and home health-care services for each benefit period except for the deductible and coinsurance.
For 2017, the Medicare Part A deductible is $1,316 for each benefit period.
The 2017 hospital coinsurance you pay per benefit period varies based on the length of your hospital stay:
- 1 through 60 days: $0 coinsurance
- 61 through 90 days: $329 per day coinsurance
- 91 days and beyond: $658 per day coinsurance for each lifetime reserve day (you may get up to 60 lifetime reserve days in your lifetime)
- After lifetime reserve days are used up: Medicare typically doesn’t cover your inpatient hospital stay.
The 2017 skilled-nursing facility coinsurance you pay per benefit period also varies based on the length of your stay:
- 1 through 20 days: $0 coinsurance
- 20 through 100 days: $164.50 per day coinsurance
- 101 days and beyond: You are responsible for all costs unless you have a separate insurance policy that covers these costs.
Medicare Part B premiums
The Medicare Part B premium is set each year by CMS. In 2017, the amount you pay may vary depending on your situation, including when you signed up for Part B.
Here’s how to help determine what you’ll pay for your Part B premium:
- Most Medicare beneficiaries pay less than the standard Part B premium described below. On average, Part B beneficiaries pay $109 per month.
- If any of the following situations applies to you, you’ll generally pay the standard amount of $134.00 for your monthly premium:
- You enrolled in Part B for the first time in 2017.
- You aren’t currently receiving retirement benefits from Social Security or the Railroad Retirement Board.
- You’re a dual eligible (have both Medicare and Medicaid), and the Medicaid program pays for the cost of your premiums. If you qualify, your $134 premium is paid by the Medicaid program.
- You’re billed directly for your Part B premium.
- Your Part B premium could be higher than $134 if your income is higher than a certain amount (see table below).
One factor that may raise your Medicare Part B premium is the late enrollment penalty. If you don’t enroll in Medicare Part B during your Initial Enrollment Period (or if you drop Part B and then get it again later), you may pay a penalty for as long as you have Part B. For 2017, the late enrollment penalty is calculated by multiplying 10% by each full 12-month period that you could have had Part B, but didn’t sign up for it. This amount is applied to your monthly premium for as long as you have Part B.
You may be able to avoid paying this late enrollment penalty if you delayed Medicare Part B because you had other health coverage, such as through an employer-sponsored group plan (either through your own or your spouse’s work). In this case, you can enroll through a Special Enrollment Period when you or your spouse stop working or that other health coverage ends, whichever comes first. If you have to pay a monthly premium for Medicare Part A, you may decide to delay enrollment in Part A as well and sign up during your Special Enrollment Period. If you enroll in Medicare with a Special Enrollment Period, you generally won’t have to pay a late enrollment penalty.
Premiums can be higher for beneficiaries with annual household incomes that exceed specific thresholds. See the table below for details.
2017 Medicare Part B premiums based on income (as reported on your tax return 2 years ago)
|Your Annual Income||2017 Premium Amount|
|Individual Tax Return||Joint Tax Return||You Pay|
|$85,000 or less||$170,000 or less||$134.00|
|$85,001 up to $107,000||$170,001 up to $214,000||$ 187.50|
|$107,001 up to $160,000||$214,001 up to $320,000||$ 267.90|
|$160,001 up to $214,000||$320,001 up to $428,000||$ 348.30|
|Over $214,000||Over $428,000||$ 428.60|
Medicare Part B deductible and coinsurance
Medicare Part B requires you to pay a yearly deductible of $183 in 2017. This deductible may be applied to most Medicare-covered health-care costs that involve physician services, outpatient hospital services, certain home health services, and covered durable medical equipment.
Once you’ve met the deductible, in most cases you will be required to pay a coinsurance of 20% of the Medicare-approved amount charged by providers for your health-care services. Many preventive services are also provided at no cost to you; these services are available without requiring you to meet your deductible. There may be limits on physical therapy, occupational therapy, and speech language pathology services. If so, there may be exceptions to these limits.
Medicare Part D premiums
Medicare Part D Prescription Drug Plans often charge a monthly premium for coverage. Since these plans are provided by Medicare-approved private insurance companies, the actual premium you pay varies by plan.
Be aware that if you go without Medicare Part D prescription drug coverage or other creditable coverage (that is, prescription drug coverage that covers at least as much as Medicare) for 63 consecutive days or more, you may be charged a late enrollment penalty when you do enroll in a Medicare Part D Prescription Drug Plan.
Medicare calculates your late enrollment penalty by multiplying 1% of the national base beneficiary premium ($35.63 per month in 2017) by the number of full months you didn’t have Medicare Part D or creditable coverage. That penalty is added to your monthly Medicare Part D premium. The national base beneficiary premium may increase each year, so your late enrollment penalty may likewise increase each year.
Medicare Part D deductible
The annual deductible for a standard Medicare Part D Prescription Drug Plan is a maximum of $400 in 2017. Medicare Prescription Drug Plans may have a lower deductible than that or even have a $0 deductible.
As you can see, premiums and deductibles may vary depending on the specific Medicare plan option you select. I’m available to clarify the costs you could expect for your particular situation. There are links below that let you schedule a phone appointment or have me email you more information. Want to compare plans available through eHealth on your own? Use the Compare Plans buttons on this page. Or, for personalized assistance, just call us as described below.
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