Deena Flinchum
First of all, I am glad to be back writing my column after working a successful 2017 Open Enrollment season. During this period, we had a record number of clients new to Medicare in late 2017 or early 2018 as well as our previous clients.
I attribute this phenomenon to an ever increasing number of people qualifying for Medicare for the first time as well as to the fact that the New River Valley (NRV) Agency on Aging is receiving a steady supply of new clients referred to it by past satisfied clients and other organizations, such as pharmacies, doctors’ offices, and employers. Many of these clients might not have known of our services without such referrals.
This year the Virginia Insurance Counseling and Assistance Program (VICAP), consisting of one hard-working staff member, Elizabeth Wray, and 10 volunteers saved clients in the NRV $603,645 by finding them Medicare Part D drug plans that will cover their drugs less expensively in 2018 than would their 2017 plans.
The Medicare Part B Premium Increase
The good news for Social Security recipients in 2018 is that we will receive a 2 percent raise, a welcome event after a meager .3 percent raise in 2017 and no raise in 2016. I have received several inquiries from clients as to why they are not really receiving a 2 percent raise but a much smaller raise or nearly none at all. The answer is that the increase in the Part B premium is taking back much of what Social Security gave.
In 2017 the premium for Part B has been $109 for most beneficiaries. Those new to Medicare in 2017 or those not receiving Social Security then paid $134, which they will continue to pay in 2018. Those with higher incomes ($85,000 for an individual and $170,000 for a couple) paid more.
The law regarding Part B premiums provides a “hold harmless” provision that will not allow a premium increase to decrease a person’s Social Security payment, from which most Part B premiums are deducted. The 2 percent cost of living increase in 2018 will allow the federal government to charge most of us who were able to avoid paying $134 in 2017 the full amount in 2018.
About 28 percent of us will pay less than $134 in 2018 because the raise would be too small not to cause a decrease in Social Security payments if we were charged $134. It is important to understand that the “hold harmless” provision applies only to the Medicare Part B premium. Many beneficiaries have their Part D drug plan premiums deducted from their Social Security payments as well. This deduction could actually lower the amount deposited in their checking accounts next year, depending upon the Part D premium amount.
Medicare Costs in 2018
Some Medicare service costs will also increase in 2018. The Part A deductible for hospital stays will be $1,340. Skilled nursing facilities are still covered totally by Part A for the first 20 days with days 21 through 100 costing beneficiaries $167.50 per day. The Part B deductible will remain $183 in 2018. Medicare then covers 80 percent of the remaining costs, leaving 20 percent for the beneficiary to pay.
A Medicare supplement or Medigap policy would help cover all or most of the above costs, depending upon the plan selected. Because it pays all costs other than the Part B deductible, which will not increase next year, a Medigap Plan G supplement remains a smart choice in 2018.
If you need more information regarding Medicare costs or what Medicare supplements cover, please call the NRV Agency on Aging at 540-980-7720.
Deena Flinchum is a retired IT professional who has lived in the New River Valley since 2002. She serves on the board of the NRV Agency on Aging and as an RSVP volunteer. She also serves the Agency on Aging as an insurance counselor.
