A table on page 35 of Get What’s Yours for Medicare contains a mistake. The table says that if your 65th birthday is in September and you wait to sign up until November, your coverage will not be effective until January. The effective date actually is February. Here’s a table on the Medicare.gov site that correctly explains the enrollment time lags.
On the Leonard Lopate show on WNYC: Philip Moeller, who writes the “Making Sen$e” Medicare column for the PBS NewsHour website and reports on aging, health and retirement for Money magazine, shares advice from his latest book, Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs, part of his “Get What’s Yours” series. Moeller explains how to select the right Medicare plan and offers retirees ways to maximize their health coverage and save money in the process.
Ryan’s plan has already begun to draw sharp opposition from an array of groups and critics, including AARP and other seniors’ advocacy organizations, labor unions, veterans, liberal think tanks and policy experts. Philip Moeller, an award-winning business journalist, author and expert on aging, health and retirement, is among the vocal critics of Ryan’s approach.
Medicare Announces 2017 Premium and Deductible Changes
By Philip Moeller
On Nov. 10, Medicare announced roughly 10-percent increases in 2017 rates for many Part B premiums and the program’s annual deductible. The increases had earlier been forecast at roughly double this size, but Medicare says it had sufficient financial reserves to absorb half the expected 2017 rise in Part B expenses.
The agency also announced modest increases for Part A, which covers care in hospitals, nursing homes, and some in-home care. Premiums and deductibles next year for Medicare Advantage and Part D prescription drug plans already have been set, and are not affected by the Part A and Part B changes.
Part B primarily covers expenses for doctors, other outpatient care, and durable medical equipment. Its annual deductible will rise from $166 this year to $183 in 2017.
Monthly Part B premiums are $104.90 a month this year for about 70 percent of Medicare enrollees. These premiums are deducted from monthly Social Security payments. Under a Social Security provision known as the “hold harmless” rule, Social Security payments cannot decline from one year to the next. Higher Part B premiums normally are funded by Social Security’s annual cost of living adjustment (COLA).
However, the COLA this year was zero, so most people saw their Part B premiums frozen for 2016. However, about 30 percent of Medicare enrollees are not held harmless, and the 2016 premiums for most of them rose to $121.80 a month. This group includes people who do not yet receive Social Security, those new to Medicare, people whose Medicare premiums are not deducted from Social Security, lower-income Medicare enrollees who also receive Medicaid, and people who pay higher-income premiums for Medicare.
For 2017, the COLA will be 0.3 percent. This amount is also too small to fully fund higher Part B premiums, so the hold harmless provisions will again be in effect. Instead of seeing their Social Security benefits rise by this amount, most people who are held harmless will instead see that increase applied to higher Part B premiums.
The average amount of that increase will raise Part B premiums by an average of about 4 percent, from $104.90 to about $109.00 a month. Exact increases will be tied to a person’s actual Social Security benefits, so Part B premiums will be larger than $109 for high-income beneficiaries and lower for those with below-average benefits.
For people who had to pay $121.80 a month this year but are now held harmless for 2017, their premiums will also rise by an average of about 4 percent. Again, specific changes will be tied to their actual Social Security payments.
For people who are not held harmless in 2017, the standard monthly Part B premium will rise from $121.80 to $134.00.
Roughly 5 to 6 percent of Medicare enrollees earn enough money to trigger the program’s high-income surcharges. Here are what these changes will look like for 2017:
Single Tax Returns:
Less than or equal to $85,000 $134.00
$85,001 to $107,000 $187.50
$107,001 to $160,000 $267.90
$160,001 to $214,000 $348.30
More than $214,000 $428.60
Joint Tax Returns:
Less than or equal to $170,000 $134.00
$170,001 to $214,000 $187.50
$214,001 to $320,000 $267.90
$320,001 to $428,000 $348.30
More than $428,000 $428.60
By comparison, the 2016 monthly Part B premiums for these income levels were $121.80, $170.50, $243.60, $316.70, and $389.80. The measure of income used to determine high-income surcharges is modified adjusted gross income. There is a two-year lag between when tax returns are filed and the surcharge is computer. Next year’s surcharges thus will generally be based on 2015 tax returns.
Part A charges no premiums to anyone who has worked long enough to qualify for Social Security benefits. However, it does have an annual deductible and daily coinsurance charges. Here are details of the changes to Part A expenses:
Part A Deductible and Coinsurance Amounts for Calendar Years 2016 and 2017
Inpatient hospital deductible $1,288 $1,316
Daily coinsurance for 61st-90th Day 322 329
Daily coinsurance for lifetime reserve days 644 658
Skilled Nursing Facility coinsurance 161 164.50
The 2017 COLA for Social Security will be only 0.3 percent. This works out to an average of only about $4 a month for the average Social Security recipient. However, anyone on Social Security and Medicare will see this meager increase eaten up by higher Medicare premiums.
Our support of older and disabled Americans is one of America’s great success stories. Social Security, enacted in 1935, is now the dominant source of income for most retirees, and the only source of income for many. Prior to Medicare’s creation in 1965, the nation’s senior citizens were the poorest age group in the nation. Today, it is the best off, although many seniors remain in or near poverty.
More than 55 million older and disabled people depend on Medicare for their health needs. Many if not most of them will tell you, if asked, that Medicare should be an easy and affordable program but that it often is not. In doing the reporting for my new book, “Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs,” I kept coming across recurring Medicare problems.
It’s not clear how much facts will matter in this year’s White House race. But with both major party conventions over, here are the details of what might be in store for the nation’s two important benefit programs that serve older Americans, plus millions of children and disabled folks: Social Security and Medicare.
Medicare is prevented by law from negotiating with drug companies over their prices. This was a pro-business feature of the 2003 law that created Medicare’s Part D prescription drug insurance program. We have been paying for it ever since, and the price tag has risen at an alarming rate in recent years for people who must take expensive new drugs.