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<\/figure>\n\n\n\nA few reminders about Medicare<\/h4>\n\n\n\n
Before we review the 2018 changes, there are certain details to remember about Medicare Part A, Part B, and Part D:<\/p>\n\n\n\n
\u2022 Part A deductibles and coinsurance amounts are not based on MAGI.<\/p>\n\n\n\n
\u2022 Part B and Part D premiums are based on MAGI and income tax-filing status. MAGI is adjusted gross income plus tax-exempt interest income.<\/p>\n\n\n\n
\u2022 MAGI reported on the most recently filed income tax return (i.e., 2016) determines whether the IRMAA will be applied.<\/p>\n\n\n\n
\u2022 The IRMAA for Part D (not shown above) applies to stand-alone prescription drug plans and those included in a Medicare Part C plan.<\/p>\n\n\n\n
\u2022 The Social Security Administration will advise beneficiaries on whether the IRMAA will increase their premiums. If you are subject to the IRMAA and your income has decreased since 2016, you may file Form SSA-44 to potentially lower your adjustment. Get more information about filing an IRMAA appeal.<\/p>\n\n\n\n
Medicare Part A: Small increases in deductibles and coinsurance charges<\/h4>\n\n\n\n
\u2022 The hospital deductible will increase $24 to $1,316.<\/p>\n\n\n\n
\u2022 Coinsurance for days 61\u201390 will increase $6 to $335 per benefit period.<\/p>\n\n\n\n
\u2022 Coinsurance for lifetime reserve days will increase $12 to $670 per day.<\/p>\n\n\n\n
\u2022 Part A will continue to cover all charges for the first 20 days of skilled nursing care. Coinsurance charges for days 21\u2013100 will increase $3 to $167.50.<\/p>\n\n\n\n
Medicare Part B: Increase in premiums due to COLA<\/h4>\n\n\n\n
In November 2017, the Social Security Administration announced a 2-percent COLA, the largest in several years. There was no COLA in 2015 and only a 0.3-percent COLA in 2016.<\/p>\n\n\n\n
\u2022 Because the COLA in the past few years has been so low, individuals and married couples in the first MAGI tier who have their Part B premium deducted from their monthly social security benefit have been paying approximately $109 per month, instead of $134. This is due to the \u201chold harmless\u201d provision, which requires any increases in an individual\u2019s Part B premium to be less than increases in that individual\u2019s social security benefits.<\/p>\n\n\n\n
\u2022 In 2018, the Part B premium will remain $134 for individuals and married couples in the first MAGI tier. The 2-percent COLA, however, may be sufficient to cover the full $134 premium without decreasing an individual\u2019s monthly social security benefit. This would nullify the hold harmless provision and increase the Part B premium for beneficiaries in the lowest MAGI tier to $134 from $109.<\/p>\n\n\n\n
Please note:<\/strong> The hold harmless provision does not apply to individuals who start their social security benefits in 2018, who are billed directly for their Part B premium, or who are subject to the IRMAA. Medicare Part B: IRMAA applied at lower income thresholds The Part B premium for individuals in the $85,001\u2013$107,000 MAGI tier and married filing jointly couples in the $170,001\u2013$214,000 MAGI tier will remain $187.50. Individuals with MAGI above $107,000 and married filing jointly couples with MAGI above $214,000 should prepare for IRMAA to apply at lower MAGI thresholds. The Medicare Access and CHIP Reauthorization Act of 2015 established these thresholds:<\/p>\n\n\n\n The 2018 Medicare Part D base premium will decrease $0.61 to $35.02. The IRMAA does not apply to individuals with MAGI at or below $85,000 and married filing jointly couples with MAGI at or below $170,000. The IRMAA will apply to all other MAGI tiers, so beneficiaries will pay this adjustment plus their plan premium each month:<\/p>\n\n\n\n![\"\"](\"https:\/\/www.vectorwealthstrategies.com\/wp-content\/uploads\/2023\/04\/vector-wealth-strategies-medicare-chart2-jpg.webp\")
<\/figure>\n\n\n\nMedicare Part D: Lower IRMAA thresholds to affect premiums<\/h4>\n\n\n\n
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