Part B Premium Will Be $121.80 in 2016, Following Budget Deal

BNA’s Health Care Daily Report™ sets the standard for reliable, high-intensity coverage of breaking health care news, covering all major legal, policy, industry, and consumer developments in a...

By Mindy Yochelson

Nov. 10 — The Centers for Medicare & Medicaid Services Nov. 10 announced that the monthly Medicare Part B premiums for certain beneficiaries will be $121.80, as a result of a bipartisan budget deal struck between the White House and congressional leaders.

The Bipartisan Budget Act of 2015 (H.R. 1314), signed by President Barack Obama Nov. 2, prevented a 52 percent spike in Medicare Part B premiums for 2016.

The notice on premiums, which cover doctor and other outpatient services, is slated to be published in the Nov. 16 Federal Register.

Impact of Spike

The spike would have affected the 30 percent of beneficiaries not covered by a “hold harmless” provision. Without congressional action, the estimated monthly Part B premium in 2016 for these beneficiaries would have been $159.30, an increase from the 2015 premium rate of $104.90.

Medicare Part B beneficiaries not subject to the “hold harmless” provision are those not collecting Social Security benefits, those who will enroll in Part B for the first time in 2016, dual-eligible beneficiaries who have their premiums paid by Medicaid and beneficiaries who pay an additional income-related premium.

The other 70 percent of beneficiaries, who are held harmless from any increase in premiums in 2016, will continue to pay $104.90.

“Thanks to the leadership of Congress and President Obama, the premiums for 52 million Americans enrolled in Medicare Part B will be either flat or substantially less than they otherwise would have been,” acting CMS Administrator Andy Slavitt said in a statement.

State Savings

The new law mitigated the Part B premium increase for these beneficiaries and states, which have programs that pay some or all of the premiums and cost sharing for certain people who have Medicare and limited incomes. The CMS Office of the Actuary estimated that states will save $1.8 billion as a result of this premium mitigation.

The CMS also announced that the annual deductible for all Part B beneficiaries will be $166 in 2016, up from $147.

“With no Social Security cost of living adjustment in 2016, many beneficiaries and their families were facing a nearly 50 percent increase in monthly premiums and an increase in their Part B deductible up to $223,” Medicare Rights Center President Joe Baker said in statement. “To limit the magnitude of anticipated premium increases, lawmakers agreed to lessen the increase, essentially offering a loan to affected beneficiaries.”

Inpatient Deductible, Coinsurance

The agency also said the Medicare Part A deductible that beneficiaries pay when admitted to the hospital will be $1,288 in 2016, up from $1,260 this year.

The Part A deductible covers beneficiaries' share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period.

The daily coinsurance amounts will be $322 for the 61st through 90th day of hospitalization in a benefit period and $644 for lifetime reserve days. For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 in a benefit period will be $161 in 2016, compared with $157.50 in 2015.

Part A Premiums for Certain Beneficiaries

The CMS also released a notice on the 2016 Part A premium paid by enrollees older than 65 who aren't otherwise eligible for benefits under Medicare Part A.

Enrollees age 65 and over who have fewer than 40 quarters of coverage and certain people with disabilities pay a monthly premium in order to receive coverage under Part A.

Individuals with 30 to 39 quarters of coverage may buy into Part A at a reduced monthly premium rate, which will be $226 in 2016, a $2 increase from 2015. Those with less than 30 quarters of coverage pay the full premium, which will be $411 a month, a $4 increase from 2015.

The Part A releases will also appear in the Nov. 16 Federal Register.

To contact the reporter on this story: Mindy Yochelson in Washington at

To contact the editor responsible for this story: Brent Bierman at