Original Medicare (Part A and B) Original Medicare is the traditional fee-for-service program offered directly through the federal government. Original Medicare includes Part A covers Inpatient/Hospital Coverage and Part B covers Outpatient/Medical Coverage. You’ll need to join a Medicare drug plan to get medicine coverage.
With Original Medicare, you can go directly to the doctor or hospital when you need care without prior permission from Medicare or your primary care physician, you pay a coinsurance for each service you receive, and there are limits on how much doctors and hospitals can charge for your care. However, there’s no limit on how much you pay out-of pocket per year unless you have supplemental coverage.
In 2017, most Medicare Part B enrollees paid an average of $109/month for their Part B premium, although enrollees with income above $85,000 had higher premiums. But the standard premium for Medicare Part B was $134/month in 2017. The reason most enrollees paid an average of only $109/month was because the cost of living adjustment (COLA) for Social Security wasn’t large enough to cover the full increase in Part B premiums.
For 70% of Part B enrollees, their premiums are deducted from their Social Security checks, and net Social Security checks cannot decrease from one year to the next (the “hold harmless” provision). The COLA for 2017 was only enough to cover about four dollars in additional Part B premiums, so the $134/month premium for 2017 only applied to enrollees to whom the “hold harmless” provision didn’t apply.
COLA numbers for the coming year should be released in the next few days, but it’s widely expected that there will be a COLA of around 2% for 2018 (as opposed to 0.3% for 2017, and 0% for 2016). CMS has not yet set Part B premiums for 2018, but it’s likely that premiums will level out for all enrollees (except those with high incomes, who always pay more), as any necessary rate change will be covered by the COLA and thus able to spread across the full population, rather than just those not “held harmless.”
Medicare Part D This is the drug coverage part of Medicare.
The Centers for Medicare & Medicaid Services CMS announced that the average basic premium for a Medicare prescription drug plan in 2018 is projected to decline to an estimated $33.50 per month. This represents a decrease of approximately $1.20 below the average basic premium of $34.70 in 2017. This is the first decline in Medicare prescription drug plan since 2012.
Medicare recipients reaching the donut hole will benefit from better prescription drug discounts. The gap in prescription drug coverage (the donut hole) starts when someone reaches the initial coverage limit ($3,750 in 2018), and ends when they have spent $5,000 (these thresholds are each $50 higher than they were in 2017). Prior to 2011, Medicare Part D enrollees paid the full cost of their medications while in the donut hole. But the ACA has been steadily closing the donut hole, and it will be fully closed by 2020. At that point, enrollees will pay just 25% of the cost of their drugs all the way up to the catastrophic coverage threshold. For 2018, while in the donut hole, enrollees will pay 35% of the cost of brand name drugs (down from 40% in 2017) and 44 percent of the cost of generic drugs (down from 51% in 2017). The Medicare Part D deductible will be $405 in 2018, up slightly from $400 in 2017.
Medicare Advantage You always have the option to get your benefits from a Medicare Advantage plan, which is a strong alternative for people who prefer to receive care through a private insurer rather than through Medicare’s original fee-for-service program.
CMS estimates that the Medicare Advantage average monthly premium will decrease by $1.91 (about 6%) in 2018, from an average of $31.91 in 2017 to $30. More than three-fourths (77%) of Medicare Advantage enrollees remaining in their current plan will have the same or lower premium for 2018.
Medicare Advantage enrollment is projected to increase to 20.4 million in 2018, a nine percent increase compared to 2017. More than a one-third of all Medicare enrollees (34% percent) are projected to be in a Medicare Advantage plan in 2018.
If you are interested in enrolling in a Medicare Advantage plan, you must meet some basic criteria:
•You must be enrolled in Medicare Part A and B.
•You must live in the plan’s service area.
•You cannot have End-Stage Renal Disease (some exceptions apply).