Summary of changes to 2016 Medicare Part A and Medicare Part B premiums and deductibles:

• 70% of the 52 million Medicare Part B beneficiaries will continue to pay $104.90 for their 2016 Medicare Part B premium.
• The other 30% of the Medicare Part B beneficiaries will see their 2016 Medicare Part B premiums increase to $121.80.
• All Medicare Part B beneficiaries will pay a higher 2016 Medicare Part B deductible of $166, up from the 2015 deductible of $147.
• People with higher incomes will pay more for their Medicare Part B coverage.  Along with higher Part B premiums, the Part B Income-related monthly adjustment amount (IRMAA) will increase for individuals earning over $85,000 or couples earning over $170,000.
• The 2016 Medicare Part A deductible will increase to $1,288 from the $1,260 deductible in 2015.
  

And, in More Detail ...
The Centers for Medicare and Medicaid Services (CMS) announced today that, since there is no 2016 Social Security cost of living increase (COLA), most of the 52 million people enrolled in Medicare Part B will be “held harmless” from any increase in 2016 Part B premiums.

Accordingly,  the Medicare Part B premium (coverage for specific doctors’ services, outpatient care, medical supplies, Durable Medical Equipment, and preventive services) would remain at $104.90 for about 70% of Medicare beneficiaries, unchanged since 2013.  (In October, 2012, there was a $5.00 increase in Part B premiums bringing the monthly 2013 Medicare Part B premiums up to $104.90).

However, the remaining 30% or 15,600,000 Medicare Part B beneficiaries not "held harmless" will see their Medicare Part B premiums increase to $121.80.  The Medicare Part B beneficiaries not subject to the “hold-harmless” provision include:

• people not collecting Social Security benefits,
  
• people who will enroll in Medicare Part B for the first time in 2016,
• dual eligible (Medicare/Medicaid) beneficiaries who have their Part B premiums paid by Medicaid, and
• beneficiaries who pay an additional income-related premium (IRMAA).

Medicare Part B Deductible:
The 2016 Medicare Part B deductible will increase to $166 for all Medicare Part B beneficiaries - up from the 2015 deductible of $147 that was in effect since 2013.

The CMS / HHS press release also noted several other changes in 2016, including:

Medicare Part A Premium:
Medicare Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.  Most (about 99%) Medicare beneficiaries receive Medicare Part A automatically if they have paid Medicare payroll taxes for 40 quarters of employment or are married to someone who paid 40 quarters of payroll taxes.

For those people who pay a Medicare Part A premium, the 2016 Part A premium is increasing slightly to $411 per month from the 2015 Part A premium of $407 (as a comparison, the Medicare Part A premium in 2013 was $441 and $451 in 2012).

CMS further noted: "[E]nrollees age 65 and over who have fewer than 40 quarters of coverage and certain persons with disabilities pay a monthly premium in order to receive coverage under Part A.  Individuals with 30-39 quarters of coverage may buy into Part A at a reduced monthly premium rate, which will be $226 in 2016, a $2.00 increase from 2015. Those with less than 30 quarters of coverage pay the full premium, which will be $411.00 a month, a $4.00 increase from 2015."

Medicare Part A Deductible:
The Medicare Part A deductible is the cost to people with Medicare for up to 60 days of Medicare-covered inpatient services in the hospitals for each benefit period (a benefit period starts the day a patient is admitted and ends when the patient has been out of the hospital for 60 days in a row.)

The 2016 Medicare Part A deductible will increase to $1,288 from the 2015 deductible of $1,260.  CMS further added that Medicare beneficiaries must pay an additional $322 per day for days 61 through 90 in 2016, and $644 per day for hospital stays beyond the 90th day.  For beneficiaries in skilled nursing facilities, the daily co-insurance for days 21 through 100 in a 2016 benefit period will be $161 , as compared to $157.50 in 2015.
 

Higher Incomes and Higher Premiums - Medicare Part B Income-related Adjustments Amounts (IRMAA):

People with Medicare who report income above $85,000 a year ($170,000 for people filing jointly) are responsible to cover a larger portion of the cost of their Medicare Part B coverage and the following table shows the 2016 IRMAA and Medicare Part B increases.

** $104.90 if "held harmless" to the 2016 Medicare Part B premium increase

Monthly Medicare Part B premiums for Medicare beneficiaries who are married and lived with their spouse at any time during the taxable year, but file separate tax returns, are:


** $104.90 if "held harmless" to the 2016 Medicare Part B premium increase

According to CMS, IRMAA affects less than 5% of Medicare beneficiaries or around 2,600,000 people.
 

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