Some Projected Medicare Costs for 2016: A Moment of Clarity and Sanity

By Elie Harriett

Some Projected Costs for 2016 – A Moment of Sanity

 The Medicare Trustee’s report was recently published showing the state of Medicare and it indicates there might be a significant increase in the Medicare costs going into 2016. 

 The report indicates a projected increase of Part B premiums from $104.90 to $159.30 per month, a possible increase of 52% for premiums in 2016. 

 This does NOT necessarily mean everyone’s premium will go up that much.  The premiums for Part B are very complicated to calculate and understand. 

 What you need to know is that if you are already on Medicare and paying your Part B premium through Social Security deductions, then your Part B premium probably will not increase in 2016.  The reason for this is because there is, at this time, not expected to be an increase in your Social Security.  There are laws which state that if you do not have a Social Security increase, and you are paying your Medicare Part B premium through Social Security deductions, then your Medicare Part B premium should not increase.   But new people enrolling into Medicare Part B, and people whose income is considered “higher than average,” they are the ones who might have to pay the increased premiums next year.

 The other thing  that might affect clients that came from the Trustee report is they are potentially expecting the Part B deductible to increase from $147 in 2015 to $223 in 2016.   

 What does this potentially mean for people? 

 If you have a Medicare Supplement policy and you have a plan D, G, K, L, M, or N, it means you will have to pay that increased deductible.  If you have a supplement plan C or F, it means you will not be impacted by the deductible increase, however you can probably expect your supplement premium to take a modest spike upwards during your next rate increase.  The premium tends to adjust with the Part B deductible very often.

 Medicare Advantage policyholders are not immune to these costs either.  Medicare Advantage plans make you pay the equivalent of Part B costs over the year, so you can probably expect your co-pays to adjust in 2016 to these increased costs also.

 Most importantly, however, is none of this may come to pass.  This report came out in July and Medicare does not announce official numbers until October.  So anything could happen.  CMS could find a way to keep costs down another year or lessen the increases to retirees.  Whatever they do, it is important to be aware of what might potentially happen.  Remember, if you have a Medicare Supplement, a Medicare Advantage plan, or a retirement plan which is secondary to Medicare, they all follow Medicare’s payment structure.  What you should NOT do is panic and change your insurance on a whim, believing one insurance company will be able to cope with the cost changes in 2016 better than another company can.  They all have to deal with Medicare.  Whenever you consider changing insurances, the premiums are just one factor.  It is always important to consider the benefits and access to your doctors when looking at changing coverage. 

For more information on Medicare Part B costs, please see this page.

For more information on which Medicare supplements pay Part B deductibles, please see this page.

You can download and read the full text of the 2015 Trustee Report here.

Some of this article by Phil Galewitz, Kaiser Health News