Medicare Part A Costs in 2017

How to Budget Your Health Expenses

Part A Medicare Costs in 2016
Know how much you could pay for Medicare Part A in 2016. Vstock LLC/Getty Images

Congress has announced Medicare costs for 2017. Everyone, regardless of their income, will be subjected to increases in out of pocket spending. Use these numbers to guide your health-care expenses in the new year.

Part A Premiums

Medicare Part A is premium-free for 99 percent of Americans. This is because most people have paid into the system for years with employee taxes for both Medicare and Social Security.

If someone has not contributed 40 quarters (10 years) or more of Medicare taxes, however, they will be required to pay premiums for Medicare as follows.

2017 Part A Premiums
Quarters of Medicare Taxes Paid Your 2017 CostsChange from 2016
40 quarters or more$0 per month----
30-39 quarters

$227 per month

$2,724 per year

$1 increase per month

$12 increase per year

Less than 30 quarters

$413 per month

$4,956 per year 

$2 increase per month

$24 increase per year

It is in your best interest to work up to 40 quarters if possible. This could mean delaying your retirement until you have met enough quarters of federally taxed employment. If you work 40 or more quarters, it could save you tens of thousands of dollars in Part A premiums over your lifetime. This could have a significant impact on your ability to retire comfortably.

The good news is that if you have not worked 40 quarters yourself, you may qualify for free Part A premiums based on your spouse's employment history.

This applies as long as you are married or you remain single after divorcing someone you were married to for at least 10 years. You may be eligible to use your spouse's record if you are widowed too. The only rule is that you remain single and were married to your spouse for at least 9 months before they passed away.

The rules for people who remarry can get a little tricky.

Please note that any pay you receive "under the table" will not count towards your eligibility for free Part A premiums since there are no documented taxes.

Part A Deductibles and Copayments

Hospital costs and skilled nursing facility costs, not surprisingly, are on the rise. They increase every year and 2017 was no exception. The average monthly rate for a semi-private room is $6,692. For a private room, the cost goes up to $7,604. If you live in Alaska, Connecticut, Hawaii, Massachusetts or New York expect to pay more. These are the most expensive states for nursing home care in the country. Alaska takes the prize at a whopping $23,451 per month.

A flat deductible rate is charged for each inpatient admission. This deductible covers all costs up to 60 days with the exception of physician fees which are covered by Part B. After 60 days, you are charged a copayment for each additional day you are hospitalized.

2017 Part A Inpatient Hospital Stay Costs
Day of Inpatient Hospital CareYour 2017 CostsChange from 2016
Inpatient hospital deductible days 0-60$1,316 per hospital stay

$28 total increase

Inpatient hospital copayment days 61-90$329 per day

$7 per day increase

Inpatient hospital copayment days 91+$658 per day

$14 per day increase

There has never been a deductible for the first 20 days of care received at a skilled nursing facility stay (SNF) immediately following an inpatient hospital stay. Things can get tricky here because some people are placed "under observation" rather than admitted as an inpatient. Simply staying overnight in the hospital does not make you an inpatient.

2017 Part A Skilled Nursing Facility (SNF) Costs
Day of SNF CareYour 2017 CostsChange from 2016
SNF days 0-20$0No change
SNF days 21-100$164.50 per day

$3.50 per day increase

SNF days 100+All costs paid out of pocket by beneficiaryNo change

The bad news is that Medicare does not pay for care that is not associated with a hospital stay.

People in need of long-term care will need to find another way to pay for a nursing home. Many seniors need to defer to ​Medicaid

Cost Summary

If you are lucky, you will never need to use Medicare Part A. You would never need hospitalization, you would never need a skilled nursing facility and you would never need hospice. Ultimately, it is important to have this coverage should you ever need it and to know how much it would cost.

Sources:

Nursing Home Costs by State. Skillednursingfacilities.org website. http://www.skillednursingfacilities.org/resources/nursing-home-costs/.

Part A costs. Medicare.gov website. https://www.medicare.gov/your-medicare-costs/part-a-costs/part-a-costs.html.

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