By Diane Weinberg
Last month, the Centers for Medicare & Medicaid Services (CMS) announced the 2016 premiums and deductibles for Medicare Parts A and B. While there is not an increase for most people, those turning 65 this year will likely have higher premiums. Here are the details…
Part A – Inpatient hospital coverage
The vast majority of Medicare beneficiaries don’t pay a Part A premium because they have at least 40 quarters of Medicare-covered employment. According to CMS, the Part A deductible covers “beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period.” In 2016, the annual deductible will increase slightly to $1,288 – $28 more than 2015. The daily coinsurance amounts will be “$322 for the 61st through the 90th day of hospitalization in a benefit period and $644 for lifetime reserve days.” Beneficiaries in a skilled nursing facility in 2016 will find the daily coinsurance for days 21 through 100 in a benefit period will be $161, a $3.50 increase over 2015. The impact of these changes means that an individual without Medicare supplemental insurance or other supplemental insurance can incur a hospital bill of $9,660 for 90 days of care, and an individual in a rehabilitation facility can incur a bill of $12,880 for 100 days of care.
Part B – Physician & outpatient hospital services
Most people with Medicare Part B will not see an increase in premiums in 2016 largely due to the Social Security Administration announcing no cost of living increase for next year. This is known as being “held harmless.” So, most will have the same monthly premium they did in 2015 – $104.90. The annual deductible for all Part B beneficiaries will be $166.
Beneficiaries may pay a higher monthly premium of $121.80 if they satisfy the following conditions:
- they are not collecting Social Security benefits;
- they enroll in Part B for the first time in 2016;
- they are a dual eligible beneficiary who have their premium paid by Medicaid; or
- they pay an additional income-related premium,
These beneficiaries account for approximately 30 percent of the 52 million Americans projected to enroll in Medicare Part B in 2016.
There were no changes in Medicare Part B premiums in 2013, 2014 or 2015. In total, beneficiaries could see an increase of $15-20 per month in premiums in 2016. Of course, those with higher incomes pay higher Part B premiums. Also, there are implications for those who are married, live with their spouse at any time during the year, and file a separate tax return. To understand the nuances of Medicare premiums and how they impact your estate planning, please contact us at 678-720-0750.