The quick answer is “not much,” unless you’re one of the 14% who will pay $16.90 more per month for their Medicare Part B. We’ll explain, but first: What is Part B?
Medicare 2016: What's New
Medicare Part B
PART B COVERS medically necessary outpatient care, preventive services, ambulance service, and durable medical equipment. (Part A covers mainly inpatient care in a hospital.)
The good news is that the vast majority of Part B members won’t see any change in their Part B premium—it will stay at $104.90 per month. But one out of seven people will have to shell out more—$121.80 per month. You’ll be in the higher paying group only if you meet one of the following criteria:
• You pay “higher income” Part B premiums
• You pay your Part B premium directly to Medicare
• Your premiums are paid by the state you live in
• You enroll in Part B during 2016
PART B DEDUCTIBLE will rise from $147 per year to $166, in 2016. PART B COINSURANCE, however, will continue to be set at 20% of the Medicare-approved amount for most doctor services (including most doctor series while you’re a hospital inpatient), outpatient therapy, and durable medical equipment.
Medicare Part A: Little change
PART A PREMIUMS
Most people don’t pay a monthly premium for Part A. But if you do, your monthly premium will rise from $407 to $411 in 2016.
TWO BASIC ALTERNATIVES
1. Original Medicare
PART A covers hospital and skilled nursing facility stays, plus some home health care visits and hospice care. PART B covers preventive care, doctor visits, and outpatient services.
Deductibles, co-payments and coinsurance (when you pay for a percentage of medical services) can be onerous because there’s no out-of-pocket ceiling. So most people buy a medigap plan, aka supplemental coverage, to cover out-of pocket costs on Parts A and B (unless, of course, they have retiree employer coverage to handle the gap).
MEDICARE PART D
Offered only through private insurers, Part D covers drugs.
REASONS TO CHOOSE ORIGINAL MEDICARE
• 70% of all Medicare beneficiaries choose traditional Medicare. When used with a medigap plan, your costs are more predictable, and you are free to see any doctor who accepts Medicare.
• Medigap has 10 federally standardized plan levels (labeled from A to N), which means coverage must be exactly the same across the board, with all insurers.
• Depending on the plan you choose, the total cost of your premiums could come close to your final out-of-pocket cost for the year.
SWITCHING FROM MEDICARE ADVANTAGE TO ORIGINAL MEDICARE
If you are thinking of switching from a Medicare Advantage plan back to traditional Medicare and you want to buy a medigap (supplemental) policy, do so while you are younger and healthier. Later on, coverage may become more expensive, or you can be denied coverage altogether. With some exceptions, you are guaranteed coverage only if you buy during the six-month period after your 65th birthday. During that time, insurers can’t refuse to sell you a policy because of a pre-existing medical condition, nor can they charge you extra. CAUTION: Once past this safe period, you are no longer guaranteed coverage under federal law (though individual states may extend some protection). Once you have bought a medigap policy, however, it generally can’t be canceled because you become old or sick.
To find out what your state has to offer, contact your local State Health Insurance Assistance Program (SHIP).
2. Medicare Advantage
Sometimes referred to as Part C, Medicare Advantage plans can be purchased only from private insurers. These plans often provide one-stop medical services because they cover Parts A and B, and a drug plan, as well. Some also throw in extras like dental and vision coverage.
REASONS TO CHOOSE MEDICARE ADVANTAGE
• 30% of all Medicare beneficiaries enroll in a Medicare Advantage plan because of the plan’s low or sometimes zero premiums, for a few services, plus low co-payments.
• Some plans also offer limited dental or vision coverage.
• Limited provider networks, PLUS doctors can be dropped or drop out on their own.
• Consumers are responsible for all cost-sharing, which can be unpredictable. For 2016, cost-sharing may be capped out at an out-of-pocket limit of far less than your cost.
• Your Medicare Advantage plan may cease to exist.
• Your plan may not cover you if you travel frequently or spend a lot of time in another state.
Note: Consider what services you would need if you were sick and take a careful look at potential costs under various plans. If you are already enrolled, the “annual notice of change” sent to plan enrollees will detail changes in coverage, costs and networks.
MEDICARE PLAN FINDER
Between January1 and February 14, if you’re in a Medicare Advantage Plan, you can leave your plan and switch to Original Medicare.
If you switch during this period, you have until February 14 to also join a Medicare Prescription Drug Plan. Your coverage will begin the first day of the month after the plan gets your enrollment form.
FOR MORE HELP
Check out the 2016 Medicare & You booklet. Read it online or download and print it out. To talk to a live person, call 1-800-633-4227.
For more information:
• medicare.gov - Official U.S. site for Medicare
• medicare.gov - Getting started with Medicare or changing plans
• medicare.gov - Drug coverage info
• ssa.gov - Medicare and Social Security issues