4 Changes to Medicare for 2016 that May Make Your Blood Boil


If you know me, you know that my spin on Medicare is that it is CONFUSING! I often refer to a quote by Warren Buffet that goes like this, "There seems to be some perverse human characteristic that likes to make easy things, difficult." Difficult, that's Medicare for sure! Below you will find 5 items that are changing due to what I believe are shortfalls in the Social Security/Medicare budgets.

1. 25%+ of Medicare Recipients will see increased premiums.

How will this happen? It will be related to how you pay your Medicare Premium. Example, if you have your Part B Premium taken directly from your Social Security check, you will not see an increase. However, if you have been paying for Medicare by check or any other method other than Social Security check reduction, you will expect to see a 52% increase in premium for 2016, yes 52%! You will increase from the 2015 rate of $104.90 up to $159.30 per month. This has all come about due to the Governments "hold harmless" clause under Social Security. Because Social Security recipients did not receive a COLA (Cost of Living Adjustment) for 2016, that means they cannot raise your Medicare Part B Premiums in a year there is no COLA. This clause does not apply to New Beneficiaries on the plan, that is their loophole!

2. Medicare Part B Deductibles Rise $19, that's almost 13%

The Part B Deductible for 2016 rises from $147 in 2015 to $166 in 2016. That is a 12.92% increase in your out-of-pocket expenses for some services, depending on your Medicare Plan. Everyone will see this increase, there is really no way around it!

3. Medicare Part A Hospital Coverage sees Cost Changes too!

For Part A hospital coverage, the deductible for hospital admissions will rise $28 to $1,288, which covers the first 60 days of covered hospital care. From the 61st to the 90th day, additional coinsurance payments of $322 per day are up $7 from 2015 levels. Part A coverage for skilled nursing facilities carries a coinsurance amount for the 21st to 100th days, and that daily amount will rise $3.50 to $161 in 2016.

4. Continued Changes in Part D Drug Plan Area

Premium costs for Medicare Part D prescription drug plans are also on the rise. The government doesn't set premiums for Part D plans, and each plan can charge a different amount depending on what specific coverage it provides and its particular costs. According to the Kaiser Family Foundation, 4.4 million participants will see their premiums rise by $10 or more per month, and based on what plan providers have announced, those who are enrolled in the most popular Part D plans can expect a premium increase averaging about 8%. In addition, Part D plans are limited by Medicare law to have deductibles no larger than $360, but a rising number of plans are bumping up against that maximum.

At the same time, the number of drug-plan choices for Medicare participants continues to drop. On average, seniors will have about 26 plans to choose from in 2016, which is down by more than half in less than a decade. Nationwide, the 886 plans offered represents an 11% decline and is the smallest number ever in the history of Part D coverage.

Medicare changes are particularly hard for older Americans on fixed incomes, especially when they involve higher costs and more financial responsibility for healthcare needs. Unfortunately, that's a trend that most Medicare participants have gotten used to seeing from year to year, and 2016 could be particularly challenging for many who rely on Medicare for financial support in staying healthy.

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