The 2018 Part B Medicare premiums will remain at $134 a month as announced by the The Centers for Medicare and Medicaid Services (CMS). However, millions of Social Security recipients who were protected from increases in previous years will have increases in 2018. These increases will be offset by social social security increases due to the Hold Harmless rule (more on that below).
If you paid $134/month in 2017 than there will be no additional cost. However, if you paid less than $134/month in 2017 than you must use all or a portion of your 2018 2.0% COLA increase to get to the $134 monthly payment. To understand how this works you must first know that your Medicare Part B premium is deducted from your Social Security benefits.
How to Determine Your Part B Medicare Premiums?
If you paid $134/month in 2017 you can skip this. You have no increase.
Step 1: Subtract $134 from your current Part B Premium. Example 1 : $134 – $100 = $34; Example 2: $134 – $120 = $14
Step 2: Multiply your current monthly Social Security benefit by 2%. Example: $1,500 x .02 = $30; Example 2: $1,500 x .02 = $30
Step 3: Your Part B Premium increase will be the smaller of the two numbers.
Example 1: Step 2 is smaller. The recipient would pay $130/month in Part B Medicare but receive no benefit from the COLA increase.
Example 2: Step 1 is smaller. The recipient would pay the maximum $134/month in Part B Medicare and receive a $16/month increase in social security benefits.
What is the Hold Harmless Provision?
Quick Answer: Increases in Medicare premiums can’t cause a person’s Social Security benefits to decline from one year to the next.
Longer Answer: The Hold Harmless rule prevents Social Security recipients from paying higher Part B premium costs so long as:
- You do not receive a Cost of Living Adjustment (COLA) large enough to cover the increased premium.
- You were entitled to Social Security benefits for November and December of the previous year.
- The Medicare Part B premium will be or was deducted from your Social Security benefits in November of the previous year through January of the current year.
- You don’t already pay higher Part B premiums because of Income-Related Monthly Adjustment Amount (IRMAA) eligibility.
The hold harmless provision does NOT protect you if:
- You are new to Medicare.
- You are subject to IRMAA.
- You are enrolled in a Medicare Savings Program (MSP).
- Were enrolled in a Medicare Savings Program in prior but lost the program because your income increased or you failed to recertify.
Who is impacted by the Hold Harmless Provision?
30% are not impacted (new enrollees, low income recipients with state benefits, people who pay high-income premiums)
42% of Part B enrollees who were paying less will now pay the full Part B premium.
28% of Part B enrollees will pay an amount less than the full Part B premium.
2018 Medicare Part A Premiums
About 99% people do not pay Part A premiums since most people have at least 40 quarters of Medicare-covered employment.
The Medicare Part A annual inpatient hospital deductible when admitted to the hospital will be $1,340 per benefit period in 2018, an increase of $24 from $1,316 in 2017.
2018 Medicare Advantage (aka Medicare Part C)
- The average monthly premium will be $30 per month, a decrease from $31.91 per month last year or 6% less.
- About 77 percent of enrollees remaining in their current plan will have the same or lower premium.
2019 Medicare Part D Prescription Drug Plan Premium
- The average monthly premium will be $33.19 per month according to the Centers for Medicare & Medicaid Services (CMS)
Part A & B Medicare Definitions
Medicare Part A: Covers inpatient hospital, skilled nursing facility, and some home health care services.
Medicare Part B: Covers preventive care, physician services, outpatient hospital services, certain home health services, durable medical equipment, metal health care and other items.
Medicare Part C: Medicare Advantage plans are sometimes referred to as Medicare Part C. They are Medicare-approved private health insurance plans for individuals enrolled in Original Medicare, Part A and Part B.
Medicare Part D: Also called the Medicare prescription drug benefit, is an optional program to help Medicare beneficiaries pay for self-administered prescription drugs through prescription drug insurance premiums (the cost of almost all professionally administered prescriptions is covered under optional Part B of United States Medicare).
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