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Medicare Parts A & B Deductibles Rise in 2016
You’ll pay higher Medicare Part A and Part B deductibles in 2016, according to the Centers for Medicare and Medicaid Services (CMS).
CMS on Nov. 10 released the premiums and deductibles for inpatient hospital (Part A) and physician and outpatient hospital services (Part B).
The Part A annual deductible that beneficiaries pay when admitted to the hospital will increase $28, from the 2015 rate of $1,260 to $1,288 in 2016.
The Part B annual deductible — the amount you pay for outpatient care each year before Medicare kicks in — will increase $19, from the current $147 to $166 next year. This is the first such increase since 2013.
Together, the A and B deductible increases will total just under $50 for the year. But because premiums are charged monthly, increases in them can add up. And in 2016, some beneficiaries will see an increase in their Part B monthly premium.
About 99% of beneficiaries do not pay a premium for Part A because they already have paid Medicare taxes while working. The amount beneficiaries pay in Part B monthly premiums varies depending on income and circumstances, but most Part B beneficiaries will not see an increase in 2016. The Part B premium for 70% of beneficiaries will remain the same in 2016 as 2015 — $104.90 a month.
But about 30% of the 52 million Americans expected to be enrolled in Part B in 2016 will see their monthly premium increase to $121.80. That’s a 16% increase. This group includes those not collecting Social Security benefits; dual eligible beneficiaries who have their premiums paid by Medicaid; those who will enroll in Part B for the first time in 2016; and beneficiaries who pay an additional income-related premium. Read more about those affected here.
Because the Social Security Administration had announced that there will be no cost-of-living increase in 2016, by law 70% of beneficiaries would be protected from an increase. That same law would have meant the remaining 30% would not be protected and would have seen their Part B premiums increase to $159.30 — that’s a whopping 52%. But Congress and the White House negotiated a budget deal that mitigated the increase.
Approximately 6% of Part B enrollees are estimated to pay income-related Part B premiums in 2016, according to the Kaiser Family Foundation. In 2016, the monthly income-related premiums will increase by 16%, the same percentage increase at each level as for the standard Part B premium. For higher-income beneficiaries, monthly premiums will range from $170.50 (for those with incomes between $85,001 and $107,000) to $389.90 (for those with incomes greater than $214,000). For more details, view the CMS charts.
Beneficiaries who file an individual tax return with income: | Beneficiaries who file a joint tax return with income: | Income-related monthly adjustment amount | Total monthly premium amount |
Less than or equal to $85,000 | Less than or equal to $170,000 | $0.00 | $121.80 |
Greater than $85,000 and less than or equal to $107,000 | Greater than $170,000 and less than or equal to $214,000 | 48.70 | 170.50 |
Greater than $107,000 and less than or equal to $160,000 | Greater than $214,000 and less than or equal to $320,000 | 121.80 | 243.60 |
Greater than $160,000 and less than or equal to $214,000 | Greater than $320,000 and less than or equal to $428,000 | 194.90 | 316.70 |
Greater than $214,000 | Greater than $428,000 | 268.00 | 389.80 |
Premiums for beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows:
Beneficiaries who are married and lived with their spouse at any time during the year, but file a separate tax return from their spouse: | Income-related monthly adjustment amount | Total monthly premium amount |
Less than or equal to $85,000 | $0.00 | $121.80 |
Greater than $85,000 and less than or equal to $129,000 | 194.90 | 316.70 |
Greater than $129,000 | 268.00 | 389.80 |
The big picture
Although the Bipartisan Budget Act of 2015 made some Medicare cost increases less severe, 2016 could be a challenging year financially to some Social Security and Medicare beneficiaries. In the face of flat Social Security benefits and rising out-of-pocket costs, many people on Medicare could have greater difficulty affording their medical care costs in the coming year, according to the Kaiser Family Foundation.
One of the best ways to control your health care costs is to review your Medicare plans annually during open enrollment, which is Oct. 15 through Dec. 7. The Medicare Open Enrollment Period is when all people with Medicare can change their Medicare health plans and prescription drug coverage for the following year to better meet their needs. Because insurance plans can change each year, it’s important to review your plans annually at this time to identify any changes that could cost you more money or improve your coverage. You may also want to review your Medicare Supplement health insurance plan each year, because those premiums also can change.
Call Medicare MarketPlace® at 1-800-639-0781 to speak to a Licensed Insurance Agent, who can conduct a free plan review for you.
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