Ask the Expert: Medicare Update
This year’s premium increases are greater for those with higher incomes.
As required in the Medicare Modernization Act, beginning in 2007, the Part B premium a beneficiary pays each month is based on his or her annual income.
Specifically, if a beneficiary’s “modified adjusted gross income” is greater than the legislated threshold amounts, the beneficiary is responsible for a larger portion of the estimated total cost of Part B benefit coverage. In addition to the standard 25 percent premium, these beneficiaries will now have to pay an income-related monthly adjustment amount.
About five percent of current Part B enrollees are expected to be subject to the higher premium amounts.
The 2008 Part B monthly premium rates to be paid by beneficiaries who file an individual tax return (including those who are single, head of household, qualifying widow(er) with dependent child, or married filing separately who lived apart from their spouse for the entire taxable year), or who file a joint tax return are:
|Beneficiaries Who File an Individual Tax Return with Income||Beneficiaries Who File a Joint Tax Return with Income||Income-Related Monthly Adjustment Amount||2008 Part B Premium|
|Less than $82,000||Less than $164,000||$0||$96.40|
|$82,001 - $102,000||$164,001 - $204,000||$25.80||$122.20|
|$102,001 - $153,000||$204,001 - $306,000||$64.50||$160.90|
|$153,001 - $205,000||$306,001 - $410, 000||$103.30||$199.70|
|Greater than $205,000||Greater than $410,000||$142.00||$238.40|
The 2008 Part B 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 $96.40 for incomes less than $82,000, $199.70 for incomes between $82,001 and $123,000, and $238.40 for incomes greater than $123,000.
2008 Medicare Rates
Changes in deductibles and premiums for Parts A and B, announced by the Centers for Medicare & Medicaid Services (CMS), include:
Medicare Part A
Services covered: inpatient hospital, skilled nursing facility, hospice, and certain home health care services.
Deductibles: The $1,024 deductible for 2008, paid by the beneficiary when admitted as a hospital inpatient, is an increase of $32 from 2007. This cost covers up to 60 days of approved inpatient hospital care in a benefit period.
Beneficiaries must pay an additional $256 per day for days 61 through 90 in 2008, and $512 per day for hospital stays beyond the 90th day in a benefit period (compared to $248 and $496 in 2007).
Daily coinsurance for the 21st through 100th day in a skilled nursing facility will be $128 in 2008, up from $124 in 2007.
Premiums: According to CMS, approximately 99 percent of Medicare beneficiaries do not pay a premium for Part A services because they have at least 40 quarters of Medicare-covered employment.
However, other seniors and certain people under age 65 with disabilities who have fewer than 30 quarters of coverage may obtain Part A coverage by paying a monthly premium set according to a statutory formula. This year the premium will be $423 per month, an increase of $13 from 2007.
In addition, seniors with 30 to 39 quarters of coverage, and certain disabled persons with 30 or more quarters of coverage, will pay $233 in 2008, compared to $226 in 2007.
Medicare Part B
The standard Part B monthly premium will be $96.40 in 2008, up from $93.50 in 2007. The Part B deductible will be $135 in 2008, up from $131 last year.