What Does 2017 Hold for Medicare?

Basic changes have already happened, but reform could go in many directions.

Dan Caplinger
Dan Caplinger
Jan 21, 2017 at 7:41AM
Health Care

Medicare faces substantial uncertainty in 2017, as the incoming Trump administration has already promised to make major healthcare reforms. Although the president said during his campaign that he would not make cuts to Medicare, members of his cabinet and lawmakers in Congress might well see things differently. Below, we'll look at the Medicare changes that have already taken effect, and then look at what's likely to be the subject of debate as the year progresses.

Image source: Getty Images.

Regular annual changes to Medicare

Each year, various provisions of Medicare see minor changes, and that happened as 2017 began. These regular annual changes to Medicare include the following:

  • Maximum Part A hospital coverage premiums for those without a long enough qualifying work history rose $2 to $413 per month.
  • Deductibles for hospital stays climbed $28 to $1,316.
  • Coinsurance for hospital stays rose $7 to $329 per day for the 61st through the 90th day of coverage, and $14 to $658 per day for use of lifetime reserve days beyond the 90th day of coverage. Skilled nursing facility stay coinsurance payments were up $3.50 to $164.50 per day.
  • Part B medical coverage deductibles climbed $17 to $183.
  • The standard monthly Part B premium rose $12.20 to $134 per month, although the typical participant protected by the hold-harmless provision saw a more modest $4.10 increase to around $109 per month.

In addition, changes in availability and premium cost for prescription drug plans under Part D took effect as the year began. In general, the trend continued toward fewer Part D plans being offered, although costs vary considerably depending on the exact nature and quality of the drug coverage each particular plan has.

These changes will affect just about every Medicare participants, and some will see substantial increases in their healthcare costs as a result. But none of the changes mentioned above was particularly unexpected. By contrast, there's no way to predict exactly what the federal government could do in changing Medicare in 2017.

Will Washington reform Medicare in 2017?

Even before President Trump took the oath of office, lawmakers were looking closely at potential changes to Medicare. Speaker Paul Ryan (R-Wis.) included substantial Medicare reforms in his Better Way healthcare proposals. Among Ryan's recommended actions were to repeal certain Medicare provisions in the Affordable Care Act, including the Independent Payment Advisory Board, which gained notoriety for being termed "death panels" by opponents of the legislation. In addition, Ryan would expand on the concept of Medicare Advantage, offering competing private plans and offering subsidies to seniors to help them pay for premiums of such plans if they choose them rather than traditional Medicare.

Meanwhile, members of the Trump administration have said that the president intends to keep his campaign promise. Nevertheless, Trump has an ambitious agenda on many different fronts, including broad repeal of the Affordable Care Act and massive corporate tax reform. Already, some key disagreements between the White House and Capitol Hill have arisen, and some believe that inevitable compromises among Republican leaders might well include Medicare reforms. With changes under the Ryan plan slated to start taking effect in 2024, the president could argue that the program remained unchanged throughout the duration of his presidency.

On the other side of the aisle, lawmakers are looking to make changes of their own. Sen. Bernie Sanders (I-Vt.) intends to propose a bill to let the Medicare program negotiate prices of prescription drugs with pharmaceutical and biotech companies. Although proposals from the former Democratic presidential candidate might seem like non-starters, Trump has already been critical of high drug prices, a stance that could create potential bipartisan support for such a measure.

Medicare participants: Watch Washington in 2017

Possible Medicare reform is just one of the ways 2017 will be tremendously important for Americans. Depending on the outcome of political wrangling, Medicare could look a lot different by the end of the year than it does right now.