Medicare Part A and Part B Basics

by MarkG

Medicare A & B Basic Costs

Medicare has many moving parts:

  • Part A
  • Part B
  • Part D
  • Medicare Advantage (Part C)
  • Medicare Supplements

Original Medicare consist of two types of coverages, Medicare Part A and Medicare Part B, which cover different services, discussed in more detail below. Given that these two separate parts are part of Original Medicare, the federal government administers them.  Part A and B differ in coverage and services, they incur different costs as well.

What is Medicare Part A?

Medicare Part A provides coverage for inpatient, or hospital care. That means it will cover the services and medical care patients receive in hospitals, like lab tests, screenings, surgeries and doctors’ visits.

Specific Services that Medicare Part A covers:

Hospital care for up to: 90 days per benefit period, 60 lifetime reserve days via a  hospital and 190 lifetime days via a certified mental health facility
Skilled Nursing Facility (SNF) Care for up to: 100 days per benefit period
Home Health Care for up to: 100 days
Hospice Care: Doctors determine the length of care

What is Medicare Part B?

Medicare Part B is known as medical insurance, as it covers outpatient care, or any medically necessary service or procedure performed outside the hospital. There are two types of Medicare Part B services:

Medically necessary services:All the materials and services used for diagnosis and treatment of an ailment.

Preventive services: Services needed to detect and prevent an illness at an early stage.

Specific Services that Medicare Part B covers:

Doctor visits
Durable Medical Equipment                                                                                                                                                                       Ambulance Service
Physical, speech and occupational therapy in outpatient settings
Chiropractic services
Mental health services in outpatient settings
X-rays and lab tests
Home health Aid
Certain drugs like anti-cancer drugs, immunosuppressant drugs and some of the following: anti-emetic drugs, dialysis drugs, physician-administered drugs

Medicare Part A Costs

Medicare Part A is usually free to most people because they either worked 10+ years of their life or had a spouse who did. Co-payments for hospital inpatient deductible and co-insurance. People can buy into Part A if they do not meet the 10 year requirement. Usually a substantial cost.

To qualify for Premium-Free Part A at age 65:

You must have Social Security or Railroad Retirement Board benefits
You must be eligible for Social Security or Railroad Retirement Board benefits
Either you or your spouse had Medicare-covered employment by the government
To qualify for Premium-Free Part A under age 65:

You received Social Security or Railroad Retirement Board benefits for 24 months
You have End-Stage Stage Renal Disease (ESRD) with certain requirements                                                                                                                     Be on SSDI(Disability) for 24 months

Medicare Part B Costs

Medicare Part B costs include a monthly premium, a deductible and co-insurance. In most cases, beneficiaries pay the standard premium. However, the premium can be covered if you get benefits from: Social Security, the Railroad Retirement Board, or the Office of Personnel Management.

Besides the premium payment, you may incur another charge known as the Income Related Monthly Adjustment Amount (IRMAA). If the modified adjusted gross income on your IRS tax return reached a certain limit two years ago, you may have to pay for this added fee.

Although there is a standard premium each year, you may pay a different amount if:

You join Part B for the first time in 2017
You get direct bills from Part B
You don’t have benefits from Social Security
You have both Medicaid and Medicare, and Medicaid covers your premiums
Your modified adjusted gross income on your tax return 2 years ago is above a limit

Compare Part A and Part B costs in the chart below Medicare Part B Costs

2017

Medicare Deductibles and Premiums

Comparing 2016 & 2017 Medicare Deductibles and Co-Payments

 

                                                                                                                 2016                         2017

Part A Deductible                                                                             $1288                      $1316

Part B Deductible                                                                             $166                         $183

Co-Payment for hospital stay days 61-90                                $322/day                $329/day

Co-Payment for hospital stay days 91 and beyond               $644/day               $658/day

Skilled Nursing Facility co-payment days 21-100                 $161.00/day         $164.50/day

 

2016 & 2017 Medicare Part B Monthly Premiums

 

File Individual Tax Return            File Joint Tax Return         2016                         2017

$85,000 or                                          below $170,000 or below $121.80                $134.00

$85,001 – $107,000                            $170,001 – $214,000         $170.50                $187.50

$107,001 – $160,000                          $214,001 – $320,000        $243.60               $267.90

$160,001 – $213,000                           $320,001 – $426,000       $316.70               $348.30

Above $213,000                                     Above $426,000              $389.80              $428.60

Those Medicare Beneficiaries under the “hold harmless” provision that are already enrolled in Medicare Part B prior to 2016, and are at the $85,000 or below threshold will have a Part B premium increase in 2017 to $109.00 Higher income earners will once again not be protected under the “hold harmless” provision in 2017.

In addition, the monthly premium rates to be paid by beneficiaries who are married, but file a separate return from their spouse (and lived with their spouse at any time during the taxable year) are:

2017 Medicare Part B Monthly Premiums

Beneficiaries who are married but file a separate tax return from their spouse:               2017

$85,000 or below                                                                                                                                        $134.00

$85,001 – $129,000                                                                                                                                     $348.30

Above $129,000                                                                                                                                           $428.60

 

* For 2017 your Premiums are based on your filing status and yearly income in 2015.

This data is provided for informational purposes only. Always check with Medicare.gov for the latest updates.

Feel free to contact us at [email protected]

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