Medicare is one of the most popular government programs available to Americans because of the healthcare services it offers to older Americans. Each year, program participants have to prepare for the annual changes that happen with Medicare. 2018 will see some provisions of Medicare change while others remain the same, and there's also the possibility of further changes occurring mid-year. Let's look at four Medicare changes that are sure things for 2018 and then turn to a possible change from healthcare reform efforts.
1. Some (but not all) Medicare premiums are on the rise
Medicare premiums typically go up each year in line with the rising cost of healthcare. Yet 2018 is unusual, because some premiums that Medicare participants pay will stay the same.
Most people get Part A hospital insurance coverage free of charge as long as they had at least 10 years of work at a job that paid into the Medicare system or are married to someone who did. Those who didn't though, will pay either $232 or $422 per month, depending on whether they had at least 30 quarters of qualifying work or not. Those numbers are up $5 and $9, respectively, from 2017 levels.
Image source: Getty Images.
Part B medical insurance premiums are slated to stay the same at $134 per month. However, some Medicare participants have paid less than that $134 in past years because of the hold-harmless provisions of the program. Most of those who paid an amount below $134 in 2017 can expect their monthly premiums to climb to $134 in 2018.
2. Some (but not all) Medicare deductibles will climb
Medicare also charges deductibles that participants have to pay before further coverage kicks in. Those amounts typically go up each year, but as with premiums, 2018 will be a bit unusual.
Part A deductibles will rise, with the hospital stay deductible rising $24 to $1,340. However, the annual deductible for Part B expenses will stay the same at $183 for the year.
3. Coinsurance payments for hospital and skilled nursing stays will go up
Under Part A, participants typically get full coverage after covering their deductible for a certain length of time, but beyond that, they have to make contributions toward their care costs. In 2018, Medicare participants will have to pay $335 per day as coinsurance for hospital stays that last longer than 60 days but are no more than 90 days. That's higher by $6 from 2017's numbers. Beyond the 90th day, Medicare participants can use up to 60 lifetime reserve days, but they'll need to pay $670 per day in coinsurance to do so, up $12 from 2017.
Skilled nursing facility rules are a bit different. Up to 20 days come at no cost, and beyond that, days 21 to 100 get charged a $167.50-per-day coinsurance payment, up $3 from 2017. After day 100, no further coverage is available, forcing participants to cover costs themselves or seek payments from a supplemental Medicare policy if they have one.
4. Income brackets for means-based surcharges will change
Medicare has a base premium for Part B coverage, but those who make above certain income thresholds pay an additional amount. For 2018, the surcharge ranges from $53.50 to $294.60 per month, which is the same as it has been in the past.
What's different are the income brackets at which various surcharges apply. The table below shows the old and new brackets for various premiums for individuals:
|
For this Medicare premium surcharge: |
The 2017 bracket was: |
But the 2018 bracket will be: |
|---|---|---|
|
$53.50 |
$85,000 to $107,000 |
$85,000 to $107,000 |
|
$133.90 |
$107,000 to $160,000 |
$107,000 to $133,500 |
|
$214.30 |
$160,000 to $214,000 |
$133,500 to $160,000 |
|
$294.60 |
Over $214,000 |
Over $160,000 |
Data source: Medicare.
The corresponding income limits for joint filers is double the amounts listed above. The net impact is that some high-income retirees will fall into higher surcharge brackets than they were in for previous years, raising their overall costs.
5. Lawmakers could make other changes in conjunction with healthcare reform
Most of the healthcare reform efforts recently have centered on changing or eliminating provisions of the Affordable Care Act. However, there are a few situations in which Medicare could be affected by what lawmakers are doing.
For instance, some policymakers have pointed to the need for Congress to comply with pay-as-you-go rules in connection with their tax reform efforts. If the bill that passes through the House and Senate and doesn't comply with pay-as-you-go, then it could trigger Medicare cuts of as much as $25 billion. Lawmakers will have the ability to change the rules to avoid the automatic cut. But if they don't, then funding reductions could cause havoc.
Medicare changes every year, but this year's situation is especially volatile. Although the regular changes to Medicare aren't all that substantial, the threat of bigger reform efforts could play a major role in defining the program's success in 2018.
