November 14, 2016
2 min read

CMS announces 2017 premiums, deductibles for Medicare Parts A, B

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CMS recently announced the premiums and deductibles for the Medicare Part A, inpatient hospital, and Part B, physician and outpatient hospital services, programs for 2017.

“Medicare’s top priority is to ensure that beneficiaries have affordable access to the care they need,” Andy Slavitt, acting administrator of CMS, said in the release. “We will continue our efforts to improve affordability, access, and quality in Medicare.”

Andy Slavitt

The cost-of-living adjustment (COLA) for Social Security benefits for 2017 will be 0.3%, according to an announcement made by the Social Security Administration on Oct. 18, 2016. Because of the low Social Security COLA, a statutory “hold harmless” provision will be implemented to protect approximately 70% of seniors from increasing Part B premiums. The standard premium for Medicare Part B for these beneficiaries will increase to $109 for 2017 from $104.90 for the past 4 years.

For the remaining beneficiaries, the 2017 average monthly Medicare Part B premium will increase 10% from $121.80 in 2016 to $134 in 2017. These beneficiaries are not subjected to the “hold harmless” provision and include those who do not receive Social Security benefits, are initiating enrollment in Part B in 2017, receive bills directly for their Part B premium, are dually eligible for Medicaid and have state Medicaid agencies pay their premium or pay an income-related premium, according to the CMS. Due to the “hold harmless” provision, the increase in Medicare costs for 2017 for all beneficiaries must be covered by the premiums for the beneficiaries in this group. HHS plans to alleviate expected premium increases and protect against unanticipated costs for these beneficiaries through her statutory authority. In collaboration with Congress, HHS will seek budget-neutral resolutions to challenges of the “hold harmless” provision.

The annual deductible will increase to $183 in 2017 from $166 in 2016 for all Medicare Part B beneficiaries.

Inpatient hospital, skilled nursing facility, as well as some home health care services are covered by Medicare Part A. Most beneficiaries (approximately 99%) have at least 40 quarters of employment covered by Medicare; therefore, these beneficiaries do not have a Medicare Part A premium.

The Medicare Part A inpatient hospital deductible increased $28 in 2017 to $1,316 per benefit period. Beneficiaries share of costs during the initial 60 days of the benefit period for Medicare-covered inpatient hospital care is included in this deductible. Beneficiaries will be required to pay a daily coinsurance fee of $329 ($322 in 2016) and $658 ($644 in 2016) in a benefit period for hospitalization during days 61 through 90 and for lifetime reserve days, respectively. Beneficiaries in skilled nursing facilities must pay $164.50 per day in 2017 compared to $161 in 2016 for extended care services during days 21 through 100 in the benefit period.

To be covered by Medicare Part A, a monthly premium must be paid by enrollees aged 65 years and older who have less than 40 quarters of coverage and have certain disabilities. This monthly Part A premium can be bought at a reduced rate of $227 in 2017 ($216 in 2016) for individuals who were married to someone with or had at least 30 quarters of Medicare coverage. The full premium priced at a monthly rate of $413 in 2017 ($411 in 2016) must be paid by uninsured aged and certain disabled individuals who have expended other coverage privileges and who have fewer than 30 quarters of coverage.

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