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From Health Law Daily, November 14, 2016

CY 2017 Part A premiums set for ‘uninsured aged’ and certain persons with disabilities

By Harold Bishop, J.D.

Medicare Enrollees age 65 and over who have fewer than 40 quarters of coverage and certain persons with disabilities pay a monthly premium in order to receive coverage under the Medicare Hospital Insurance Program (Medicare Part A). Individuals who had at least 30 quarters of coverage or were married to someone with at least 30 quarters of coverage may buy into Part A at a reduced monthly premium rate, which will be $227 in calendar year (CY) 2017, a $1 increase from CY 2016, according to an Advance Release notice from CMS. The notice also provides that uninsured aged and certain individuals with disabilities who have exhausted other entitlement and who have less than 30 quarters of coverage will pay the full premium, which will be $413 a month in CY 2017, a $2 increase from CY 2016.

Uninsured aged. Section 1818 of the Soc. Sec. Act provides for voluntary enrollment in Medicare Part A, subject to payment of a monthly premium, of certain persons aged 65 and older who are uninsured under the Old-Age, Survivors, and Disability Insurance (OASDI) program or the Railroad Retirement Act and do not otherwise meet the requirements for entitlement to Medicare Part A. These "uninsured aged" individuals are uninsured under the OASDI program or the Railroad Retirement Act, because they do not have 40 quarters of coverage under Title II of the Soc. Sec. Act (or are/were not married to someone who did). Persons insured under the OASDI program or the Railroad Retirement Act and certain others do not have to pay premiums for Medicare Part A.

Disabled individuals. Section 1818A of the Soc. Sec. Act provides for voluntary enrollment in Medicare Part A, subject to payment of a monthly premium for certain disabled individuals who have exhausted other entitlement. These are individuals who were entitled to coverage due to a disabling impairment, but who are no longer entitled to disability benefits and free Medicare Part A coverage because they have gone back to work and their earnings exceed the statutorily defined "substantial gainful activity" amount.

Premium reduction for certain voluntary enrollees. Section 1818(d) of the Soc. Sec. Act provides for a reduction in the premium amount for certain voluntary enrollees. The reduction applies to an individual who is eligible to buy into the Medicare Part A program and who, as of the last day of the previous month:

  • had at least 30 quarters of coverage under Title II of the Soc. Sec. Act;
  • was married, and had been married for the previous one-year period, to a person who had at least 30 quarters of coverage;
  • had been married to a person for at least one year at the time of the person's death if, at the time of death, the person had at least 30 quarters of coverage; or
  • is divorced from a person and had been married to the person for at least 10 years at the time of the divorce if, at the time of the divorce, the person had at least 30 quarters of coverage.

Section 1818(d)(4)(A) of the Soc. Sec. Act specifies that the premium that these individuals will pay for CY 2017 will be equal to the premium for uninsured aged enrollees reduced by 45 percent.

CY 2017 monthly premiums. The monthly premium for the uninsured aged and certain disabled individuals who have exhausted other entitlement for the 12 months beginning January 1, 2017, is $413. The monthly premium for the individuals eligible under section 1818(d)(4)(B) of the Soc. Sec. Act, and therefore, subject to the 45 percent reduction in the monthly premium, is $227.

Comparison to CY 2016. The CY 2017 premium of $413 is approximately 0.5 percent higher than the CY 2016 premium of $411. CMS estimates that approximately 654,000 enrollees will voluntarily enroll in Medicare Part A, by paying the full premium. The CY 2017 reduced premium of $227 is approximately 0.5 percent higher than the CY 2016 reduced premium of $226. CMS estimates an additional 67,000 enrollees will pay the reduced premium. CMS estimates that the total aggregate cost to enrollees paying these premiums in CY 2017, compared to the amount that they paid in CY 2016, will be about $17 million.

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