Navigating the world of Medicare means not only understanding your benefits and coverage, but keeping tabs on the changes that impact the program year after year. If you rely on Medicare, it's imperative that you understand what changes you might be facing in 2016. Here are some key developments to be aware of.
You might pay more for Medicare Part B
You're probably used to paying a premium for Medicare Part B, but the way you pay your premium could impact your actual cost. Some people pay their Part B premiums directly out of their Social Security checks, and if you're one of them, then you won't bear the brunt of 2016's increase. The reason has to do with the fact that those receiving Social Security benefits won't be getting a cost-of-living increase for 2016. Thankfully, what this means is that if your benefits aren't going up, then you're not on the hook to pay Medicare anything extra. You'll simply pay the same monthly premium of $104.90 as you did in 2015.
However, if you're among the 30% of people who pay for Medicare directly, then get ready to fork over some extra bucks 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.
Your deductibles for Medicare Part B will go up
Even if you're 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.
You could face therapy cap limits
In an ideal world, Medicare would cover all of the services you 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. What this means is that 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.
You get fewer choices and higher premiums for Medicare Part D
If you rely on Medicare Part D for your prescription drugs, then you may be in for an unpleasant surprise, 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 in reality, that's an 11% decrease from 2015. Additionally, an estimated 4.4 million Part D participants will see their premiums increase by at least $10 a month, which may not seem like an earth-shattering amount, but it's still significant for those living on a fixed income and a tight budget. And if all Medicare participants stick with their current drug plans, the average monthly premium cost will rise over $41, a sizable 13% increase from 2015.
While these 2016 Medicare changes aren't exactly cause for celebration, knowing what to expect gives you a chance to plan accordingly. You may have no choice but to spend more for medical care in 2016, but if that's the case, then the earlier you start adjusting your budget, the sooner you'll be able to recover financially. Remember, too, that while you should be aware of what you're paying for Medicare in 2016, you should not get too comfortable with those amounts -- because come 2017, there's a good chance you'll have a whole new set of changes to contend with.