Prepare for Premium Pain
Sep 23, 2015
For the last three years, the monthly premium for Medicare Part B, medical insurance, has been $104.90 and the annual deductible $147. That is about to change. The Medicare trustees are predicting the 2016 premium will be $159.30, an increase of $54.40. Only about 30% of Part B beneficiaries will have to pay this new amount. That’s because the other 70% are subject to the “hold harmless” provision and will continue to pay $104.90 every month.
Here’s what hold harmless means. In 2016, experts predict there will be no increase in the Social Security cost of living adjustment (COLA). With no COLA, any increase in the Part B premium would hurt beneficiaries who are on Social Security now. They would have to dip into savings to cover the difference. However, Part B costs are rising and someone has to cover them. These higher costs will be spread over fewer beneficiaries, including new Medicare enrollees in 2016, those not on Social Security, and anyone subject to the Income-related Monthly Adjustment Amount (IRMAA).
It’s not just the premium that will cause pain. The annual deductible for 2016 is projected to be $223, up from $76 this year. Remember, these amounts are projections, subject to change. It's all but certain, the amounts will increase.
Alert: Drug costs are increasing, too. Be sure to pay attention to what’s happening with your drug plan in 2016. If you would like expert help, check out 65 Incorporated’s Open Enrollment Tune-up at https://www.65incorporated.com/personalized-medicare-enrollment-consultation/open-enrollment-consultation/.