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Investments and Planning

Medicare Changes for 2016

Every year brings little changes to Medicare, and 2016 is no different. Here is a handy summary of the changes this year.

Part B premiums will rise 16% for some Medicare beneficiaries, 0% for others. Since the federal government’s Consumer Price Index failed to advance on a year-over-year basis across most of 2015, no Social Security cost-of-living adjustment will occur in 2016. When there is no Social Security COLA for a given year, Medicare premiums cannot increase for beneficiaries who have them withheld from Social Security benefits – that is federal law. Because of that law, approximately 30% of Medicare beneficiaries will shoulder the program’s premium increases.1

A federal budget deal made those premium increases less onerous, but they are still significant.

**In 2016, monthly Part B premiums rise 16% to $121.80 for those Medicare recipients that do not have Medicare premiums withheld from Social Security checks.

**Correspondingly, the 5% of beneficiaries that pay high-income surcharges will see those surcharges go up 16% for 2016, in line with the 16% base premium increase.

**About 70% of Medicare recipients will still pay monthly Part B premiums of $104.90 in 2016.2


As usual, deductibles & copayments will increase. For 2016, deductibles and coinsurance amounts are adjusted as follows:

**Part A deductible – $28 higher to $1,288

**Part B deductible – $19 higher to $166

**Hospitalization copayment for days 61-90 – $7 higher to $322

**Hospitalization copayment for days 91 & beyond – $14 higher to $644

**Skilled Nursing Facility Care daily copayment, days 21-100 – $3.50 higher to $1611,3

When it comes to Part D plans, 2016 brings higher premiums & fewer choices. Will you be one of the 4.4 million Part D plan participants who will see their monthly premiums rise by $10 or more? The Kaiser Family Foundation projects just that for 2016.1

**KFF believes the most popular Part D plans will hike premiums by about 8% this year.

**A growing number of Part D plans now have yearly deductibles approaching the $360 limit set by Medicare.

**The typical Medicare beneficiary will have about 26 Part D plans to choose from this year – not even half the amount of Part D plan choices available to the average Medicare recipient 10 years ago.

**Across the country, only 886 Part D plans are being offered in 2016 – 11% fewer than in 2015, fewer than at any time since these plans were introduced in 2006. 1

That is a quick summary of Medicare changes for 2016. If you have questions about your Medicare coverage or Medicare enrollment in light of these changes, please contact me via phone or email.


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1 – fool.com/retirement/general/2015/12/13/3-changes-to-medicare-in-2016.aspx [12/13/15]

2 – forbes.com/sites/ashleaebeling/2015/11/16/its-official-medicare-part-b-premiums-will-rise-16-in-2016-for-some-seniors/ [11/16/15]

3 – medicare.gov/your-medicare-costs/costs-at-a-glance/costs-at-glance.html [12/28/15]


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