Medicare Announces Major Savings for Medicare Beneficiaries in 2014

The Centers for Medicare & Medicaid Services (CMS) announced yesterday that health care reform efforts are bringing significant savings to Medicare beneficiaries, such as zero growth in Medicare Part B premiums and deductibles in 2014, and more than $8 billion in cumulative savings in the prescription drug coverage gap known as the “donut hole.”

Since the Affordable Care Act (ACA) provision to close the prescription drug donut hole took effect in 2010, over 7.1 million seniors and people with disabilities who reached the donut hole have saved $8.3 billion on their prescription drugs, according to CMS data.  In the first 9 months of this year, nearly 2.8 million people nationwide who reached the donut hole this year have saved $2.3 billion, an average of $834 per beneficiary.  This is even more savings than this time last year (2.3 million beneficiaries had saved $1.5 billion for an average of $657 per beneficiary).  The Affordable Care Act will provide additional savings each year as the donut hole shrinks until the coverage gap is closed in 2020.

CMS announced that the standard Medicare Part B monthly premium and the Part B deductible will be the same in 2014 as it was in 2013, $104.90 and $147 respectively. The premium has either been less than projected or remained the same for the past 3 years, and the past 5 years have been among the slowest periods of average Part B premium growth in the program’s history.

Remember that people with Medicare don’t need to sign up for the new Health Insurance Marketplace, as they are already covered by Medicare.  Also additional coverage such as through Medicare Advantage plans or Medigap plans are NOT sold through the Marketplace (referred to as Covered California in our State).

Below is an excerpt from CMS’ recent press release on Medicare’s 2014 costs:

Medicare Parts A and B Premiums and Part A Deductible

By law, the standard Part B premium represents roughly 1/4 of the average cost for beneficiaries aged 65 and over, plus a contingency margin to provide for possible variations between actual and projected costs.  Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and other items.

Beginning in 2007, beneficiaries with higher incomes have paid higher Part B monthly premiums.  These income-related monthly premiums, which affect less than 5% of people with Medicare, also will remain the same as they were in 2013.

CMS also announced today that the Medicare Part A premium, which pays for inpatient hospital, skilled nursing facility, and some home health care services, will drop $15 in 2014 to $426.  Although about 99% of Medicare beneficiaries do not pay a premium for Part A since they have at least 40 quarters of Medicare-covered employment, enrollees age 65 and over and certain persons with disabilities who have fewer than 30 quarters of coverage pay a monthly premium in order to receive coverage under Part A.  Beneficiaries who have between 30 and 39 quarters of coverage may buy into Part A at a reduced monthly premium rate which is $234 for 2014, a decrease of $9 from 2013.

The Medicare Part A deductible that beneficiaries pay when admitted to the hospital will be $1,216 in 2014, an increase of $32 from this year’s $1,184 deductible.

The deductible covers beneficiaries’ costs for up to 60 days of Medicare-covered inpatient hospital care in a benefit period. Beneficiaries must pay $304 per day for days 61 through 90 in 2014, and $608 per day for hospital stays beyond the 90th day.  For 2013, per day payment for days 61 through 90 was $296, and $592 for beyond 90 days.  For beneficiaries in skilled nursing facilities, the daily co-insurance for days 21 through 100 in a benefit period will be $152.00 in 2014, compared to $148.00 in 2013.

Learn about programs that can help pay some or all of beneficiaries’ premiums and coinsurance for certain beneficiaries with a limited income.

See a state-by-state breakdown of savings in the coverage gap, at: California beneficiaries have saved over $680 million since 2010 and over $209 million in the first 9 months of 2013.

For more information about the 2014 Medicare Part B premium, and other Medicare info, visit Also see CMS’s recent press release.

Karen Joy Fletcher

Our blogger Karen Joy Fletcher is CHA’s Communications Director. With a Masters in Public Health from UC Berkeley, she is the online “public face” of the organization, provides technical expertise, writing and research on Medicare and other health care issues. She is responsible for digital content creation, management of CHA’s editorial calendar, and managing all aspects of CHA’s social media presence. She loves being a “communicator” and enjoys networking and collaborating with the passionate people and agencies in the health advocacy field. See her current articles.