Changes in Medicare Premiums, Deductibles, etc., in 2013

Most of the Medicare annual change amounts have been released for 2013, and the good news is that although beneficiaries will be seeing some increases in their premiums, deductibles, etc., these are, on the whole, rather modest.

The Part B deductible for 2013 will be $147, up $7 from $140. This is a small increase to those of you who don’t have a Medigap policy, or whose policy doesn’t pay your Part B deductible.

Because there was a Social Security cost-of-living increase (of 1.7%), Medicare Part B monthly premiums were again permitted to rise, and the standard premium you will pay is $104.90, up $5.

For those of you who have to pay the High Income Part B Premium Surcharge, your monthly surcharge will increase from $2 to $11 per month, depending on your income level. And also remember that your 2013 surcharge will be based on your 2011 income, and this may put you in a higher or lower surcharge bracket, or may put you into or out of having to pay a surcharge.

And the Part B coinsurance rate for outpatient mental health services will decrease from 40% in 2012 to 35% in 2013. (And next year, 2014, it will lower to 20%, the general Part B coinsurance rate, so there will no longer be any disparity.)


The Part A inpatient hospital deductible goes up by $28 in 2013 to $1,184. This is the amount you are responsible for the first 60 days of an inpatient stay. And, of course, the various co-pays for longer hospital stays, and for skilled nursing facility (SNF) stays beyond 20 days, are also affected by this change, but these are modest.

Those relatively few of beneficiaries who pay for Part A will welcome the news that their premiums will actually decrease. The Part A premium for those currently paying $451 a month will decrease $10 a month to $441, and for those paying $248, it will go down $5 to $243 a month.


The Centers for Medicare & Medicaid Services reports that in Part C – Medicare Advantage or Medicare managed care – the premiums have gone down by 7%, on average, for 2013. But always remember that you need to do your homework every year to see if you are in the best plan for you. And also remember that you mostly have only until December 7 to do this, that is, the Annual Election Period or Open Enrollment lasts only until that date. Several exceptions exist to this deadline. One is that if your plan is leaving the Medicare program, you have until February 28. Another is that, if there is a plan with a five-star quality rating where you live (and there may not be one where you are), you can switch to it after Open Enrollment and in any month in 2013 (except December). And this is new in 2013; to facilitate beneficiary enrollment into higher quality plans, a special enrollment period (SEP) will be given to beneficiaries who are enrolled in “low performing” Medicare Advantage and Part D drug plans. By “low performing” is meant any plan which has had an overall star rating of less than three stars for three years in a row. The Centers for Medicare & Medicaid Services (CMS) will send notices to individuals enrolled in these plans informing them of their plan’s low rating and offering them an opportunity to request a special enrollment period to move into a higher quality plan for 2013. They can do this any time after the Open Enrollment and in any month in 2013 (except December). And, finally, if you have been affected by Hurricane Sandy, you can call 1-800-MEDICARE to ask for an extension of the December 7 deadline.


For Part D, again changes are minimal from 2012, but the overall recommended structure has changed some. The deductible is up $5 to $325, but remember that many plans have none or a smaller deductible than this. The next payment band, the 25% Coinsurance Band, covers the next $2,645 of your drugs, and you pay 25% of this, or $661.25, while your plan covers $1,983.75. Your plan may structure this differently. In the “donut hole,” in 2013 you will have to pay only 47.5% of the cost of your brand name drugs, slightly less than the 50% you did in 2012, as manufactures will give a 52.5% discount. And now the government will pay 21% of the cost of your generics, up from 14% in 2012. And, finally, in the Catastrophic (or 5% Insurance) Band, which starts when your drug “expenses” reach $4,750, you will pay a minimum of $2.65 for a generic or $6.60 for a brand name drug, but no more that 5% of its cost, if that is greater than these amounts. (And by “expenses” is meant your deductible, anything you spent in the 25% band and in the donut hole, AND the 52.5% that manufacturers discount on your brand name drugs in the donut hole (but not the 21% the government pays on your generics).

The structure for “Extra Help” or “Low Income Subsidy” beneficiaries is, of course, different, but the increases these beneficiaries will experience are nil to minimal.

And on the whole Part D premiums have increased by only a hair for 2012. But the admonition above with regard to Medicare Advantage plans applies here also – do your homework to make sure you are in the best Part D prescription drug plan for 2013. And the special enrollment periods discussed above (Non-Renewing plans, the 5-Star Quality Rating, Low-Performing plans and Hurricane Sandy) all apply to Part D Plans also.

nd there is good news for those of you who have to pay the High Income Part D Premium Surcharge. Your monthly surcharge will either not increase, or will increase by only 20¢ a month. But remember, as with the High Income Part B Premium Surcharge, your surcharge will be based on your 2011 income, and this may put you into a higher or lower bracket or may put you into or out of having to pay a surcharge.

Medicare Premiums, Deductibles, etc., in 2013