Q: How did Medicare benefits change in 2016?
A: There are several changes for Medicare enrollees in 2016, although not all of them apply to all enrollees.
Part B premiums
Premiums for Medicare Part B have increased for about seven million Part B enrollees (roughly 14 percent of all enrollees). But the increase is much smaller than the 52 percent that was originally expected. Thanks to a loan from the general fund to the Medicare trust fund, the premium increase for Part B ended up being about 16 percent instead of 52 percent.
For Bart P enrollees who are receiving Social Security checks and whose income doesn’t exceed $85,000 for a single individual, the Part B premium remained the same as it was in 2015: $104.90/month.
But for Part B enrollees who are not receiving a Social Security check (either because they’re covered by a state pension instead of Social Security, or because they’ve elected to delay their Social Security benefits), the premium is $121.80/month in 2016, plus a $3/month surcharge that’s being used to pay back the treasury loan. The higher premium is expected to apply to all Medicare Part B enrollees with incomes under $85,000 ($170,000 for a couple) in 2017, assuming there’s a cost of living adjustment for Social Security in 2017 (there was no cost of living adjustment for 2016, which is why Part B premiums couldn’t increase for most enrollees this year).
For low-income Part B enrollees who are also covered by Medicaid or a Medicare Savings Program, the Part B premium increased to $121.80 plus the surcharge, but state Medicaid programs are continuing to pay the Part B premium. So those enrollees aren’t directly impacted by the higher price in 2016.
For high-income Part B enrollees, premiums in 2015 ranged from about $147/month to about $336/month, depending on income. In 2016, they range from about $171/month to about $390/month.
Part B deductible
The Part B deductible was $147 in 2015, and it has increased to $166 in 2016. The treasury loan to the Medicare trust fund also served to limit the Part B deductible – it had originally been slated to increase by 52 percent in 2016, to $223. The deductible increased for all Part B enrollees, but some of them have supplemental coverage that pays their Part B deductible (this includes Medicaid, employer-sponsored plans, and Medigap plans C and F).
In addition, many Medicare Advantage plans have low copays and deductibles that didn’t necessarily increase the way the Part B deductible increased (Medicare Advantage enrollees pay the Part B premium, but their Medicare Advantage plan wraps Part A, Part B, and various supplemental coverage together into one plan, with out-of-pocket costs that are different from Original Medicare).
Part A deductible
Medicare Part A covers hospitalization costs. In 2015, the deductible was $1,260. According to the 2015 Medicare Trustees Report, it was expected to increase only slightly, to $1,300 in 2016. And ultimately, the increase was even smaller than expected: the Part A deductible is $1,288 in 2016. This increase applies to all enrollees, although many enrollees have supplemental coverage that pays all or part of the Part A deductible.
There are slightly more Medicare Advantage plans available in 2016 than there were in 2015; nationwide, there are a total of 2,001 plans in 2016, up from 1,945 in 2015. The average enrollee is able to select from among 19 different plans – up from 18 in 2015. And for the first time in five years, there was an increase in the number of zero premium Medicare Advantage plans available.
Part D prescription drug coverage
But for stand-alone Part D prescription drug plans, there aren’t as many choices available in 2016. Part D beneficiaries have an average of 26 plans from which to choose – last year, they had an average of 30 available plans. And average premiums for Part D increased for 2016. Across the top ten Part D plans in 2015 (which accounted for 80 percent of all Part D enrollees), the average premium increased by eight percent for 2016. If all enrollees in those top ten plans kept the same plan for 2016, their average premiums increased from $38.83/month to $41.34/month. But that’s just an average; enrollees on some plans faced double digit price hikes if they didn’t shop around during open enrollment (October 15, 2015 to December 7, 2015).
The good news is that the Affordable Care Act is gradually closing the donut hole in Medicare Part D. In 2016, enrollees pay just 45 percent of the plans cost for brand name drugs while in the donut hole, and 58 percent of the cost of generic drugs.
The Medicare therapy cap increased slightly again for 2016. The therapy cap is the benefit limit that applies to outpatient therapy, including physical therapy, speech language pathology, and occupational therapy. It includes the amount that Medicare pays (generally 80%) and the amount the patient pays (the remaining 20%). For 2016, the therapy caps have increased by $20:
- Physical therapy (PT) and speech language pathology (SLP) combined therapy cap is $1,960
- Occupational therapy (OT) therapy cap is $1,960
Once the caps are reached, there’s an exception process that allows for medically necessary therapy costs to be covered up to $3,700 (for PT and SLP combined, and also for OT), and a manual review process is available for medically necessary therapy services that exceed $3,700.