The Centers for Medicare & Medicaid Services approved increases to several different areas of Medicare. These changes have flown under the radar for Medicare participants, and some enrollees are confused if they will be impacted by the changes.
Part B increases
The majority of current Medicare beneficiaries will not see a change in their monthly premiums, but 30 percent are experiencing higher Part B premiums in 2016. For some enrollees, the 2016 premium is 15 percent higher than last year. This increase only impacts participants that are enrolling for the first time or anyone that is not receiving Social Security benefits (due to the “Hold Harmless” provision, Medicare deductions cannot increase faster than Social Security benefits).
High-income earners will see an even higher increase in their monthly charges. In 2016, the high-income thresholds are lowering, and the premiums are rising. For any enrollee earning $85,000 to $107,000 ($170,000 to $214,000 for couples) expect to pay premiums of $170.50 for Part B premiums every month. This is an almost $24 increase from last year’s $146.90 premiums for the income bracket.
Aside from the Part B premiums, participants will also see an increase in their Part B deductibles. The Part B deductible will be going up from $147 to $166, a $19 increase. The Part B deductible is the amount enrollees must pay before their Medicare plan begins to cover their health care costs.
Part A increases
Part B is not the only Medicare plan changing in 2016; Part A will see several changes as well. The majority of Medicare enrollees do not pay for Part A premiums. Anyone that has worked for over ten years and paid Medicare taxes will receive their Part A Medicare without paying for premiums.
Part A Medicare is used to cover the cost of inpatient care, skilled nursing facilities, lab tests, hospice, and doctor’s visits. The annual deductible for Part A will experience a small increase, from $1,260 to $1,288 for those that use the Medicare coverage. The amount of coinsurance for Part A Medical is going to increase $322 per day for the 61st through the 90th day, and then $644 for days 91-150.
For anyone that pays for Part A, they will pay higher premiums and deductibles as well. For monthly premiums, the amount depends on how many months the enrollees have worked. For anyone who has worked less than 30 quarters, they will pay the maximum amount of $411 each month. Anyone who has worked between 30 to 40 quarters, they will pay $226 every month. Both premiums are only marginally increased from last year.
These changes came after much speculation on how much the increase would be. The 16 percent increases were one of the highest enrollees have ever seen; many experts believed that premiums and deductibles would jump by more than 50 percent or greater. Thanks to a bipartisan budget act signed in November, the increases were significantly cut, saving Medicare beneficiaries thousands of dollars.
While the increases were not as significant as they could have been, enrollees can still expect to pay more increases in the coming years. Instead of facing an immediate increase in 2016, the increases will come in small incremental doses over the next nine years. Each year will bring a small $3 increase to Part B monthly premiums.
For 70 percent of Medicare recipients, these changes will only slightly affect your health care budget, but new enrollees, higher income earners, and those not receiving Social Security could be put under extra strain. This smaller premium and deductible increases are easier for many retirees and Medicare recipients to handle versus one larger price hike, but the increases are coming regardless.
