Today, the Centers for Medicare & Medicaid Services (CMS) announced the 2017 premiums for the Medicare inpatient hospital (Part A) and physician and outpatient hospital services (Part B) programs.
And guess what? They’re going up. Especially if you’re rich. Not even rich, really. Just better off than most. Funny how the timing of this happens right after the Presidential election, hmm?
The “average” Medicare Part B premium will be about $109.00, compared to $104.90 for the past four years. That’s for about 65% of the Medicare population. The standard monthly premium for Medicare Part B will be $134.00 for the other 30% in 2017, which is a 10 percent increase from the 2016 premium of $121.80.
The above changes do not affect your Medicare Advantage monthly premiums but they may impact you if you’re on a Medicare Supplement plan that covers either the Part A and/or the Part B deductibles. More about deductible increases later in the post.
If you did the quick math above, you’ll notice we have 5% of the population left to talk about. These 5% pay much higher costs for the exact same Medicare coverage.
Since 2007, people with higher incomes have to pay higher Medicare Part B monthly premiums. I covered this pretty extensively in a post you can read by clicking here. These income-related monthly premium rates affect roughly 5% of people with Medicare.
Individuals earning between $85,001 and $107,000 and couples earning between $170,001 and $214,000 will see their monthly premiums rise from $170.50 a person this year to about $187.50 in 2017. For those earning more than $214,000, or $428,000 for couples, the increase is to $428.60 a month, from $389.80 in 2016.
The Medicare Part A inpatient hospital deductible that beneficiaries pay when admitted to the hospital will be $1,316 per benefit period in 2017, an increase of $28 from $1,288 in 2016.
If that wasn’t enough, CMS also announced that the annual deductible for all Medicare Part B beneficiaries will be increasing to $183 in 2017 (compared to $166 in 2016).
In 2017, Social Security benefits will rise a lousy 0.3%. Social Security says the cost-of-living adjustment will add $5 to the average monthly payment for all retired workers. This means that whopping $5 won’t cover the increase in your Medicare Part B premium, so your checks will actually be getting a bit smaller this year.
Not much you can do about this, really. If you’re on a Medicare Advantage plan, these increases will not affect your plans, at least in 2017. However if you’re on a Medicare Supplement plan (Medigap), your insurance company has been waiting on this announcement for some time. That’s because they have to set their 2017 Medicare Supplement pricing, and increasing Part A and/or Part B deductibles means they’ll have to pay more out in claims. More paid claims equals higher policy premiums. Keep an eye on your Medicare Supplement renewal premiums when you get them in the mail… most carriers send them out in the first three months of the year. An annual increase larger than 5-9% may mean it’s time to shop for a Medicare Advantage plan. You can check out my post on those types of plans by clicking here.
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Author Bio: Ben started Prepare for Medicare in 2014 to help people help people get objective answers to questions about Medicare. He’s held leadership roles at numerous Fortune 500 Medicare health insurers in product development, sales, marketing and strategy for over 20 years.