CMS Releases Medicare Part A and B Values for 2018

Volume 40 | Issue 154

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The Centers for Medicare & Medicaid Services has announced the 2018 Medicare Part A and B premium, deductible, and coinsurance amounts. There is a small increase in Part A amounts, and while the standard Part B premium will not increase in 2018, some Part B enrollees protected by a “hold harmless” provision in 2017 will pay more. The Part B deductible will not increase for any beneficiaries. The 2018 Medicare Part D parameters were released earlier this year. (See our May 15, 2017 For Your Information.)

Medicare Part A

On November 17, the Centers for Medicare & Medicaid Services (CMS) announced the Medicare Part A premium, deductible and coinsurance amounts for 2018, and provided a fact sheet with additional background.

Premiums

Approximately 99% of Medicare beneficiaries do not pay a Part A premium because they have at least 40 quarters of Medicare-covered employment. For those individuals who pay a premium, the Medicare Part A premiums for the 12-month period beginning on January 1, 2018 are as follows:

Premium Type 2018 2017 Change
Premium to purchase coverage for individuals who are not otherwise eligible for Medicare Part A and certain disabled individuals $422 $413 2.2%
Premium for certain individuals entitled to a reduced monthly premium (who had at least 30 quarters of Medicare-covered employment or were married to someone with at least 30 quarters of Medicare-covered employment) $232 $227 2.2%

Deductible and Coinsurance Amounts

The Medicare Part A deductible and coinsurance amounts for the 12-month period beginning on January 1, 2018 are as follows:

Deductible and Coinsurance Type 2018 2017 Change
Deductible for up to 60 days of Medicare-covered inpatient hospital care $1,340 $1,316 1.8%
Daily coinsurance for 61st through 90th day of hospitalization $335 $329 1.8%
Daily coinsurance for lifetime reserve days $670 $658 1.8%
Daily coinsurance for 21st through the 100th day of extended care services in skilled nursing facility $167.50 $164.50 1.8%

 

Medicare Part B

The CMS announcement and fact sheet also included the Medicare Part B monthly premium rates and annual deductible amounts for 2018.

The standard monthly premium for Medicare Part B will not increase in 2018.

Premium Type 2018 2017 Change
Standard monthly premium $134 $134 0.0%

 

About 70% of Part B enrollees benefit from a “hold harmless” provision that protects them from any increase in Part B premiums (typically deducted from Social Security checks) that would effectively reduce their monthly Social Security payments. These Part B enrollees had their Part B premium capped at an average of about $109 for 2017. (See our November 30, 2016 For Your Information.) CMS estimates that for 2018, 42% of Part B enrollees will pay less than the $134 standard premium due to the hold harmless provision. The provision was triggered because the cost-of-living adjustment (COLA) for Social Security benefits in 2018 will be 2.0%, (see our October 13, 2017 For Your Information) and an increase in the Part B premium to $134 would reduce the net benefit Social Security payment for these Part B enrollees.

Who is not protected by the “hold harmless” provision?

  • New Medicare enrollees in 2018
  • Higher-income Medicare beneficiaries
  • Medicare beneficiaries dually eligible for Medicare and Medicaid
  • Medicare Part B enrollees not receiving Social Security benefits

The 30% of Social Security recipients not subject to the hold harmless provision will pay a minimum of $134 a month for Part B coverage in 2018. Medicare beneficiaries with higher incomes pay a larger portion of their Medicare Part B premium amounts based on a predetermined formula.

The 2018 Medicare Part B monthly premiums based on income tax filing status and income are:

Individual Filing Status Married Filing Jointly Status 2018 Monthly Premium 2017 Monthly Premium Change
Income up to $85,000 Income up to $170,000 $134.00 $134.00 0.0%
$85,001 – $107,000 $170,001 – $214,000 $187.50 $187.50 0.0%
$107,001 – $133,500 $214,001 – $267,000 $267.90 $267.90 0.0%
$133,501 – $160,000 $267,001 – $320,000 $348.30 $267.90 30.0%
$160,001 – $214,000 $320,001 – $428,000 $428.60 $348.30 23.1%
More than $214,000 More than $428,000 $428.60 $428.60 0.0%

 

Comment: The increase in the Part B premium rates for some individuals with higher incomes is a result of the Medicare Access and CHIP Reauthorization Act of 2015, which increased the amounts that higher-income enrollees must pay for coverage under Medicare Parts B and D starting in 2018. See our For Your Information from May 29, 2015.

Married Filing Separately, Lived with Spouse During Tax Year 2018 Monthly Premium 2017 Monthly Premium Change
Income up to $85,000 $134.00 $134.00 0.0%
More than $85,000 $428.60 $428.60 0.0%

 

Finally, the Medicare Part B deductible for the 12-month period beginning on January 1, 2018 will remain at $183.

Deductible Type 2018 2017 Change
Medicare Part B $183 $183 0.0%