Making Medicare Part A and B make sense
There is a lot of uncertainty surrounding 2014 premiums and deductibles for Medicare Part A and Part B in 2014.The good news is standard the monthly premium for Medicare Part B will be $104.90 in 2014, exactly the same as it was in 2013. The premium has either been less than projected or remained the same for the past three years. The last five years have been among the slowest periods of average Part B premium growth in the program’s history.
More than 99 percent of people on Medicare don’t pay any premium for Part A, because they or their spouse paid into the Medicare Trust Fund through payroll withholding for at least 40 quarters during their working lifetimes. For those few beneficiaries who do pay premiums for Part A, depending on the number of quarters worked, they are going down either $9 or $15 less a month in 2014.
The Part B annual deductible in 2014 will also remain unchanged, at $147. The inpatient deductible, for those enrolled in Part A of conventional Medicare and are hospitalized, increases from $1,184 to $1,216 for a hospital stay of up to 60 days.
For beneficiaries in skilled nursing facilities, the daily co-insurance for days 21 through 100 will be $152, an increase of $4 from 2013. Beneficiaries do not pay anything for the first 20 days of skilled nursing facility care. However, to qualify for Medicare coverage, your doctor must certify that you need daily skilled care, like intravenous injections or physical therapy, and your stay follows at least a three-day, medically necessary, inpatient hospital stay for a related illness or injury.
Approximately five percent of the current Medicare population will pay higher Medicare Part B premiums, based on his or her annual income. This means your Part B premiums are higher in 2014 if the income shown on your 2012 tax return (the one you filed in April of 2013) is greater than $85,000 for an individual return, or $170,000 for a joint return. If this is the case for you, you will get a special notification about it, along with information about how to pay, and how to appeal if you think you shouldn’t have to pay the higher premiums. If you are in this group, and if you also have a Medicare Prescription Drug Plan (including Medicare Advantage plans which incorporate prescription drug coverage), you will also have to pay a surcharge based on income. This will also be sent to you separately.
People with low incomes can participate in programs that reduce or even eliminate Part B premiums, deductibles and/or co-payments. The income limit is currently $1,293 per month for a single person and $1,745 for a married couple. It is revised annually, typically in January. Other restrictions apply.
For information about this, contact your local State Health Insurance Assistance Program (SHIP). The contact number is printed on the back of your Medicare & You handbook, or call 1-800-MEDICARE [1-800-633-4227] and ask for the SHIP number in your state.
(Mike Fierberg works for the Centers for Medicare & Medicaid Services in their Denver regional office.)