2016 Changes in Medicare – How will they affect you?

The Medicare Trustee report is expected to be implemented January 1, 2016, which calls for increases both in the Part B premiums paid monthly by seniors and the Part B deductible.

Currently, most seniors pay $104.90 monthly for their Medicare Part B premium. In 2016, this cost is expected to go up to $159.30/month for many seniors. This 52% premium increase will affect:

  • Any senior initially enrolling in Medicare Part B at age 65 starting in January 2016.
  • Those seniors on Medicare already who are NOT currently collecting social security benefits.
  • All seniors subject to IRMAA (income-related monthly adjustment amount) – these are seniors whose tax return shows adjusted gross incomes of over $85,000 (single) or $170,000 (joint return). IRMAA sliding scales will increase the Medicare Part B premium in accordance with income.

Those who will NOT be affected by this potential Part B premium increase are those seniors who are currently (as of 2015) collecting social security benefits. This “Hold Harmless Provision” states that for those currently collecting social security benefits as income, if a cost of living social security increase isn’t enough to cover the Part B premium increase, then those seniors on social security will not be subject to the Medicare Part B premium increase. Since the cost of living adjustment will NOT cover this for 2016, seniors now collecting social security benefits (which equals about 70% of Medicare beneficiaries) will not be forced to pay the premium increase next year.

The Medicare Trustee report also calls for an increase in the Medicare Part B deductible – from $147 in 2015 to $223 in 2016. This change will affect ALL Medicare beneficiaries. However, it is estimated that Part B deductible won’t stay that high for too long:

Medicare Part B Deductible Estimates:

2016 = $223

2017 = $169

2018 = $171

These are the current estimates as stated in the Medicare Trustee report. 

How will these changes affect those seniors on Medicare Supplement Insurance policies?

Seniors on Plan F and Plan C can expect to see rate increases since these first dollar coverage policies will now be forced to absorb the increased Part B deductible. Additionally, CSG Actuarial (the expert authority on Medicare Supplement rate data) predicts that Plan G is the most stable place to be – rates for Plan G are expected to remain fixed, or even to decrease starting in 2016.

With all of these changes in Medicare on the horizon, it is always wise to consult with an Independent Medicare Agent regarding your Medicare insurance benefits. A licensed agent can help you figure out exactly how your specific situation will be impacted by potential changes. Please give us a call at (512) 516-2043 with any questions you may have – we are happy to help you review the many different plan options available to you!

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