It’s official. For most seniors the tiny 0.3% cost of living increase they will receive next year will be wiped out by an equally small increase in Medicare Part B premiums.
Premiums for Medicare Part B, which covers medically necessary services such as doctor visits, will cost $109 a month in 2017, up from $104.90 for the past four years, for about 70% of seniors, according to the Centers for Medicare and Medicaid Services (CMS). Those seniors will benefit from a “hold harmless” provision in the law which ensures that Medicare B premiums cannot rise more than the previous year’s cost of living increase in Social Security benefits.
(Related on ThinkAdvisor: Tiny Social Security COLA to Pinch Seniors as Medicare Costs Surge)
Premiums for the remaining 30% of beneficiaries, however, will jump 10% in 2017 to $134 a month, from $121.80.
The “hold harmless” provision applies only to beneficiaries who receive Social Security benefits. It does not apply to those who are enrolled in Part B for the first time; are dually eligible for Medicare and Medicaid, which pays their Medicare B premiums; or are subject to higher Medicare premiums because their income exceeds $85,000 for individuals or $170,000 for couples filing jointly.
In addition to the changes in Medicare premiums, CMS announced a higher annual deductible for all Medicare Part B beneficiaries in 2017 and for Medicare Part A in-patient hospital costs.
The 2017 deductible for Medicare Part B increases 10% to $183 from $166 currently and for Medicare Part A the deductible rises to $1,316 from $1,288, up 2%. In addition, coinsurance amounts for the 61st through 90th day of hospitalization increases to $329 from $322, also 2%
For beneficiaries in skilled nursing facilities, the daily coinsurance payments for days 21 through 100 of extended care services in a benefit period will rise to $164.50 in 2017 from $161 currently.
“These increases illustrate how rising health care costs erode Americans’ retirement income, and why it is critical to plan ahead,” commented Cathy Weatherford, CEO of the Insured Retirement Institute, in a statement after the CMS announced the new Medicare premiums and deductibles.
For their part, CMS Acting Administrator Andy Slavitt, said that CMS will “continue our efforts to improve affordability, access, and quality in Medicare” in keeping with the program’s “top priority is to ensure that beneficiaries have affordable access to the care they need.”
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