Changes in 2016 to Medicare

On March 2, 2016 I received a blog post from, “My Medicare Matters, National Council on Aging.” pertaining to up coming changes i the Medicare system and it was written in a very easy to understand way.  I know some of you may not receive the updates sent out by either the Federal, State or by the National Council on Aging so I figured I would re-post it here in the hopes it reaches even just one person who can use the information within.  


My Medicare Matters

January 20, 2016

Medicare-changes-BLOG

by: Margie Johnson Ware, Aging and Health Specialist. 

Medicare is ALWAYS changing. And 2016 is no exception! Read on for a rundown of two changes you can expect to see this year, and why.

Part B premium prices

One major change this year is something we haven’t experienced for a while–higher premiums.  Premiums increased for beneficiaries who do not yet collect Social Security, as well as any individuals who are subject to Income-Related Adjustments (IRMAA) to their Medicare B and D premiums.

Why? Federal legislation requires that Part B recipients’ premiums pay 25% of the cost of Part B expenses.  In the last few years that remained stable, and the premium for most people was $104.90.

However, Part B has a problem when there’s no cost-of-living adjustment (COLA) in Social Security, often called a ‘raise’—which is what happened this year. Separate legislation prevents a decrease in Social Security recipients’ payments because of an increase in Part B, known as “hold harmless.” So anyone who was paying $104.90 in 2015 and currently collects Social Security is frozen at that level.

But because the Part B funds have to “balance,” other Social Security beneficiaries have to pick up the slack.  This includes individuals whose premiums are covered by their state and the federal government, as well as higher-income beneficiaries who are subject to an additional premium (IRMAA). It also includes all the Medicare beneficiaries not yet on Social Security.

If Congress had allowed the math to play out, recipients would have seen premiums as high as $160.00/month.  Sensing taxpayer outrage, the decision was made to set the premium at $121.80.  If there is a COLA increase in Social Security for 2017, all beneficiaries may be subject to a higher premium.

It’s confusing, I know. Suffice it to say that if your Part B premium went up, there’s a reason. And if you write your member of Congress to complain, they’ll probably tell you it could have been worse! If your premium stayed the same for 2016, give thanks and get ready for a change in 2017.

Part B deductible prices

Another change is an increase in the Part B deductible from $147 in 2015 to $166 in 2016. Some individuals never notice this because their Medicare Supplemental Policy (Medigap) covers it, but for many beneficiaries the beginning of the year can be a rude shock to your wallet. Your first $166 in physician’s bills will be billed directly to you. In addition, your Part D drug plan may have a deductible as high as $360. So now you’re up to $526—a significant chunk of change.

If you were unaware of the effect of these deductibles, you will probably just have to grin and bear it this year (unfortunately). But going forward, you will want to look at whether you need to take these into consideration when choosing plans for next year. In many cases, Medicare Supplemental plans that do not pay the Part B deductible offer savings over the year—savings much greater than the Medigap premium you pay. Remember you can apply to change Medigap any time of year but aren’t guaranteed a new policy.

In the case of Part D plans, it’s important to look at the plan’s annual cost including the premium, deductible and cost per drug. You may find plans that might be a bit more expensive but allow “first-dollar” coverage (i.e. does not have a deductible) are better for you. Remember to compare plans during the Open Enrollment Period Oct. 15 – Dec. 7.

In any case, if you are going to be subject to deductibles in the future, make plans now to include these amounts in your budget—especially if you also have other big one-time charges on the horizon, such as car or life insurance payments. Being smart about cash flow can save you headaches (and interest charges) in 2016!


I have also included the website address for all the other sites referenced on it.

https://www.mymedicarematters.org/2016/01/medicare-will-change-2016-heres-expect/

Such as the article on, “For Caregivers: A Guide to Supportive Care” which is available at,

https://www.mymedicarematters.org/2016/02/for-caregivers-a-guide-to-supportive-services/?SID=56db176b06dd6

You can also find, “How to Enroll a Loved One: A Guide to Part D” at,

https://www.mymedicarematters.org/2015/07/how-to-enroll-a-loved-one-in-medicare-part-2-a-guide-to-part-d/?SID=56db176b06dd6

Here’s to all the caree’s (ones being cared for) and those wonderful caregivers who are taking care of them, I hope this helps in some way to ease your thoughts about Medicare and just some of the changes we plan to see coming up here in 2016.

Thank you for taking the time to read my blog.  If you like this, there is more on my home site at, http://www.pickyourpain.org, please check it out and sign up to receive more as it becomes available.

Richard K.

http://www.pickyourpain.org

pickyourpain@att.net

 

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