2016 Medicare Parts A & B Premiums and Deductibles Announced

Release November 10, 2015 By CMS

Today, the Centers for Medicare & Medicaid Services (CMS) announced the 2016 premiums and deductibles for the Medicare inpatient hospital (Part A) and physician and outpatient hospital services (Part B) programs.

Part B Premiums/Deductibles

As the Social Security Administration previously announced, there will no Social Security cost of living increase for 2016. As a result, by law, most people with Medicare Part B will be "held harmless" from any increase in premiums in 2016 and will pay the same monthly premium as last year, which is $104.90.

Beneficiaries not subject to the "hold harmless" provision will pay $121.80, as calculated reflecting the provisions of the Bipartisan Budget Act signed into law by President Obama last week. Medicare Part B beneficiaries not subject to the "hold-harmless" provision are those not collecting Social Security benefits, those who will enroll in Part B for the first time in 2016, dual eligible beneficiaries who have their premiums paid by Medicaid, and beneficiaries who pay an additional income-related premium. These groups account for about 30 percent of the 52 million Americans expected to be enrolled in Medicare Part B in 2016.

Because of slow growth in medical costs and inflation, Medicare Part B premiums were unchanged for the 2013, 2014, and 2015 calendar years. The "hold harmless" provision would have required the approximately 30 percent of beneficiaries not held harmless in 2016 to pay an estimated base monthly Part B premium of $159.30 in part to make up for lost contingency reserves, according to the 2015 Trustees Report. However, the Bipartisan Budget Act of 2015 mitigated the Part B premium increase for these beneficiaries and states, which have programs that pay some or all of the premiums and cost-sharing for certain people who have Medicare and limited incomes. The CMS Office of the Actuary estimates that states will save $1.8 billion as a result of this premium mitigation.

CMS also announced that the annual deductible for all Part B beneficiaries will be $166.00 in 2016. Premiums for Medicare Advantage and Medicare Prescription Drug plans already finalized are unaffected by this announcement.  

Since 2007, beneficiaries with higher incomes have paid higher Part B monthly premiums. These income-related monthly adjustment amount (IRMAA) affect fewer than 5 percent of people with Medicare. Under the Part B section of the Bipartisan Budget Act of 2015, high income beneficiaries will pay an additional amount. The IRMAA, additional amounts, and total Part B premiums for high income beneficiaries for 2016 are shown in the following table:

Beneficiaries who file an individual tax return with income:	Beneficiaries who file a joint tax return with income:	Income-related monthly adjustment amount	Total monthly premium amount
Less than or equal to $85,000	Less than or equal to $170,000	$0.00	$121.80
Greater than $85,000 and less than or equal to $107,000	Greater than $170,000 and less than or equal to $214,000	48.70	170.50
Greater than $107,000 and less than or equal to $160,000	Greater than $214,000 and less than or equal to $320,000	121.80	243.60
Greater than $160,000 and less than or equal to $214,000	Greater than $320,000 and less than or equal to $428,000	194.90	316.70
Greater than $214,000	Greater than $428,000	268.00	389.80

Premiums for beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows:

Beneficiaries who are married and lived with their spouse at any time during the year, but file a separate tax return from their spouse:	Income-related monthly adjustment amount	Total monthly premium amount
Less than or equal to $85,000	$0.00	$121.80
Greater than $85,000 and less than or equal to $129,000	194.90	316.70
Greater than $129,000	268.00	389.80

Part A Premiums/Deductibles

Medicare Part A covers inpatient hospital, skilled nursing facility, and some home health care services. About 99 percent of Medicare beneficiaries do not pay a Part A premium since they have at least 40 quarters of Medicare-covered employment.

The Medicare Part A annual deductible that beneficiaries pay when admitted to the hospital will be $1,288.00 in 2016, a small increase from $1,260.00 in 2015. The Part A deductible covers beneficiaries' share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. The daily coinsurance amounts will be $322 for the 61^st through 90^th day of hospitalization in a benefit period and $644 for lifetime reserve days. For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 in a benefit period will be $161.00 in 2016 ($157.50 in 2015).  

Enrollees age 65 and over who have fewer than 40 quarters of coverage and certain persons with disabilities pay a monthly premium in order to receive coverage under Part A. Individuals with 30-39 quarters of coverage may buy into Part A at a reduced monthly premium rate, which will be $226.00 in 2016, a $2.00 increase from 2015. Those with less than 30 quarters of coverage pay the full premium, which will be $411.00 a month, a $4.00 increase from 2015.

Deductibles and Coinsurance for 2016

Part A Deductible and Coinsurance Amounts for Calendar Years 2015 and 2016 Type of Cost Sharing
	2015	2016
Inpatient hospital deductible	$1,260	$1,288
Daily coinsurance for 61st-90th Day	315	322
Daily coinsurance for lifetime reserve days	630	644
SNF coinsurance	157.50	161.00

Don't Lose Your Subsidy in 2016

If you received premium subsidy in 2014, please be aware that you need to file IRS form 8962 with
your 2014 taxes.  If you did not file form 8962 you need to file this form by August 31, 2015 or you may lose your premium subsidy in 2016.

Here is the link to form 8962

OTC Nexium Prompts Drug Formulary Changes

NEXIUM® 24HR (esomeprazole 20 mg) became available as an over-the-counter (OTC) 14-day treatment for frequent heartburn in May 2014. As a result, most drug formulary (list of covered drugs) are changing.  The following drugs will be moving (or have moved) to a higher formulary Tier.

• Nexium 
• Esomeprazole 
• Lansoprazole 

King v. Burwell U.S. Supreme Court Ruling: Payment of Premium Subsidies Upheld

Good News! This morning the Supreme Court made an important decision about the Health Insurance Marketplace. Their ruling means that consumers will continue to receive quality affordable health care coverage no matter where they live.

For consumers getting their coverage through the Health Insurance Marketplace, this means that nothing has changed. You will still continue to receive your subsidy. 

If you have any questions please don't hesitate to contact Tiffany or Bud.

You can watch the president’s address here and read the Supreme Court’s ruling here.

Additional information about what the Supreme Court decision means for you can be found online at: HealthCare.gov/Decision. 

Information from:Centers for Medicare & Medicaid Services (CMS)

ACA Requiring Insurance Companies to Collect Social Security Numbers

Beginning this year, health insurers have to send the Internal Revenue Service (IRS) information about health plan members and their insurance coverage, including their Social Security number (or other tax identification number). It’s one of the requirements of the Affordable Care Act (ACA).

The ACA requires that everyone have qualifying insurance, qualify for an exemption, or potentially pay a tax penalty. The IRS will cross-check the information in tax returns against the information health insurers are required to submit for every person they cover. This IRS review will confirm that individuals have the required coverage and don’t have to pay a tax penalty.

Many insurance companies have been phasing out the use of SSNs for member identification. However, with the ACA requirements, health insurers will now be sending letters or otherwise reaching out to plan members asking for that information if they don’t already have it.

Does Your Business Qualify for the Health Care Tax Credit?

As an small employer you may qualify for a health care tax credit.

To qualify for the tax credit, all of the following must apply:

• You have fewer than 25 full-time equivalent (FTE) employees
• Your average employee salary is about $50,000 per year or less
• You pay at least 50% of your full-time employees' premium costs
• You offer coverage to your full-time employees through the SHOP Marketplace

The tax credit is worth up to 50% of your contribution toward your employees' premium costs (up to 35% for tax-exempt employers).

Important Links:

• Calculate your FTE's
• Estimate your tax credit

For more information you can visit Healthcare.gov SHOP overview.

Tiffany Geiger, President

A New Special Enrollment Opportunity

The Centers for Medicare and Medicaid Services (CMS) announced a new Individual Health Insurance Marketplace Special Enrollment Opportunity beginning on March 15 through April 30. This Special Enrollment Opportunity is for individuals and families who did not have health coverage in 2014 and are subject to the fee or "shared responsibility payment" when they file their 2014 taxes. 

Who is Eligible

To be eligible you must meet ALL of the following:

• You must live live in a state that has enrollment through Healthcare.gov. (Ohio is one of these states.)
• Are not currently enrolled in health coverage through Healthcare.gov for 2015 
• Attest that you paid the fee for not having health coverage in 2014 
• Attest that you first became aware of, or understood the implications of, the penalty or shared responsibility payment, after Feb. 15, 2015, when Open Enrollment ended.

What This Means

• You  will have the opportunity to purchase an On-Exchange Individual Health Plan from March 15 through April 30. 
• Enrollments made by the 15th of the month will have coverage effective on the 1st day of the following month. 
• Enrollments made after the 15th of the month will have coverage effective on the 1st day of the second month.

State-based Exchanges (SBE) have the flexibility to determine whether they will establish a similar special enrollment period. Check specific SBE websites for additional information. 

Tiffany Geiger, President