If you're eligible for Medicare, or will be in the coming year, there are a few changes you should know about for 2017.
An increase in the Department of Labor's Consumer Price Index (CPI) means there'll be an increase in Social Security benefits and Medicare Part B premiums. For most recipients the increases almost offset each other, but those who aren't covered by the "hold harmless" provision (about 30 percent of recipients) face a larger Part B premium increase.
These changes, along with several others, will go into effect soon and you should consider how they could affect your budget.
A slight increase in your Social Security benefits. Since 1975, Social Security benefits have an automatic cost-of-living adjustment (COLA). The adjustment depends on the CPI and helps keep your benefits in line with the rising cost of goods.
There wasn't a COLA for 2016 benefits, but there is a .3 percent adjustment for next year. Meaning, you'll get an additional $3 per $1,000 you receive in benefits. The estimated average monthly benefit for all retired workers is expected to increase $5, from $1,355 to $1,360.
Medicare Part B premiums will also rise. The COLA also affects Medicare Part B premiums, the part of Medicare that covers some types of procedures and medical equipment. However, for about 70 percent of Medicare recipients, the Social Security Act's "hold harmless" provision prohibits an increase to Medicare B premiums of more than the previous year's COLA adjustment.
According to the Centers for Medicare and Medicaid Services, held harmless recipients will pay $109 per month, an increase of $4.10.
If you aren't held harmless, Part B premiums could increase by about 10 percent. The remaining 30 percent of Social Security beneficiaries will have their Part B premium increase by about 10 percent. You could fall into the non-held-harmless group if you:
• Are a new enrollee
• Enrolled in Medicare but don't receive Social Security benefits
• Get billed directly for Medicare Part B
• Receive Medicare and Medicaid benefits and your state Medicaid programs pay your Part B premium
• Are a high-income earner subject to an income-adjusted premium
For the non-held-harmless group, the premium depends on the recipient's (or couple's when filing a joint tax return) adjusted gross income (AGI).
• The lowest monthly premium, for individuals who have an AGI of $85,000 or less ($170,000 for couples), will increase from $121.80 to $134 a month per person.
• On the high end, for recipients with an AGI over $214,000 ($428,000 for couples), the monthly premium will increase from $389.80 to $428.60 per person.
Medicare Part A and B deductibles will also increase. Most people don't have to pay Medicare Part A premiums, but you could still have to pay a deductible or coinsurance for some Part A benefits.
• The deductible for inpatient hospital coverage, which helps cover the first 60 days of care, will increase from $1,288 to $1,316 per benefit period. Daily coinsurance rates also increase. Each day past day 90 counts towards your lifetime reserve. You have a maximum of 60 lifetime reserve days; after which you could be responsible for all costs.
• Skilled nursing facility care is completely covered for your first 20 days.
• Daily coinsurance for day 21 to 100 of skilled nursing care will increase to $164.50.
• You could be responsible for all costs beyond day 100.
• The Part B annual deductible will also increase, from $166 to $183. Generally, after you've met your deductible, you'll pay 20 percent of Medicare-approved costs for services covered by Part B.
Bottom line: Social Security benefits, Medicare Part B premiums and Part A and B deductibles and coinsurance will increase in 2017. Whether you're held harmless or not, take steps to understand which changes could affect you and alter your budget accordingly.
Nathaniel Sillin directs Visa's financial education programs. To follow Practical Money Skills on Twitter: www.twitter.com/PracticalMoney.
The election results are in at the local, state and national level, and as expected, Democrats are doing well in state and national races. Colorado has elected Jared Polis as governor; nationally the Republicans appear to retain control of the Senate while Democrats now control the House of Representative.
With a ballot full of local and state measures, voter turnout in Delta County topped 71%, with 15,889 ballots cast. Statewide, voter turnout was just over 52%.
Of the three Delta County residents seeking state offices, Matt Soper won over Thea Chase in State Representative Dist. 54; Mike Mason lost to Julie McCluskie in State Representative Dist. 61; and Olen Lund lost to Kerry Donovan in State Senate Dist. 5.
Locally, in the City of Delta voters rejected a .5% sales tax increase to fund recreation, as well as recreational marijuana sales. The sale of medical marijuana and cultivation/manufacturing facilities was approved by a slim margin. Delta voters also gave the city the green light to move forward with selling or trading the Cottonwood and Riverbend Park, and to sell the old Municipal Light and Power Building.