Today’s Forecast: Cloudy with a chance of high costs.
Planning a route through the ‘Medicare Jungle’ can be extremely difficult. It’s important to understand your benefits and coverage as well as keeping an eye on changes that occur year after year in the United States healthcare system. If you solely commit to Medicare, it’s critical that you recognize what changes you might be facing in 2016. Here are some crucial developments to pay attention to.
Anticipate paying more for Medicare Part B
In 2016, the way you pay your Medicare Part B premium could impact your actual cost. If you pay your Part B premiums directly out of your Social Security check, then you won’t feel the impact of 2016’s increase. Those receiving Social Security benefits won’t be getting a cost-of-living increase for 2016. What this means is that if your benefits aren’t going up, then you’re not going to pay Medicare anything extra. You’ll simply pay the same monthly premium of $104.90 as you did in 2015.
Conversely, if you’re among the 20-30% of people who pay for Medicare directly, then get ready to hand over some additional cash in 2016. The standard Part B premium for 2016 is $121.80, but yours could be higher if you make more than $85,000 as a single tax filer or $170,000 as a joint filer. The same holds true if you’re applying for Medicare Part B for the first time in 2016.
Sadly, deductibles for Medicare Part B will go up
Despite being among the 70% who won’t be affected by a rise in Part B premiums, you can still expect to see your annual deductible go up. For 2016, you’ll pay $166 for your Part B deductible, up from $147 in 2015. Once you meet your deductible, you’ll most likely continue to pay 20% of the Medicare-approved amount for most medical services.
Therapy Cap Limits
In a perfect world, Medicare would cover all of the services you most desperately need. In reality, you might face therapy cap limits on physical, occupational, and speech therapy if you receive these services at an outpatient facility. For 2016, the therapy cap limit for physical therapy and speech-language therapy services combined is $1,960, which is the same limit applied to occupational therapy services on their own. Consequently, once you meet your annual Part B deductible, Medicare will pay its share for these services — typically 80% — and you’ll pay yours, until the total amount paid by both you and Medicare reaches the applicable therapy cap limit. You may be able to qualify for an exception to these limits, but it’ll require you to submit proof of medical necessity that meets Medicare’s standards.
Big shocker: Fewer choices and higher premiums for Medicare Part D
If you count on Medicare Part D for your prescription drugs, then you’re in for a pickle, as you’ll be limited to an average of 26 prescription drug plans in 2016, down from 30 in 2015. There will be 886 plans offered nationwide in total, which may sound like a lot, but the truth is, that’s an 11% decrease from 2015. Furthermore, an estimated 4.4 million Part D participants will see their premiums increase by at least $10 a month, which may not seem like a ‘life or death’ situation, but it’s still significant for those living on a fixed income and a tight budget. If all Medicare participants stick with their current drug plans, the average monthly premium cost will rise over $41, a considerable 13% increase from 2015.
Now that you know what to expect you can plan accordingly. Medicare premiums and deductibles could be going up in 2016, so if that’s the case, then get a head start on your budget, that way, you’ll be able to recover financially. Remember, that you can’t get too comfortable with what you’re paying for Medicare in 2016, because come 2017, there’s a good chance you’ll have a whole new set of challenges to contend with.