Medicare usually makes some changes every year.  Medicare changes Part D without exception.  Medicare and the insurance companies make adjustments based upon drug costs and contracts with pharmaceutical companies.  Medicare is also gradually eliminating the dreaded gap in Part D coverage, better known as the “Donut Hole.”

Medicare Changes Part D Deductible

The change that gets the most recognition this year is the Medicare Part D changes deductible.  Medicare changes Part D deductible from $350 in 2016 to $400 in 2017.  That is a 14% increase to the deductible alone, which is a constant reminder to review your Medicare Part D plan each year with your agent.

Part D Shell Game

A $400 deductible is sizeable.  Most of the Part D plans have the deductible, but some do not.  The way those plans are able to eliminate the deductible is by spreading the deductible out through the various co-pays on your medications.  The other way is to apply the deductible only to higher Tier, more expensive drugs, e.g., Tier 3-5 medication.  The Part D plans are a bit of a shell game shifting costs from this drug to another.  It is important to not be distracted by the various co-pays.  Medicare.gov has a wonderful medication calculator that will compared all of the Part D plans in your area side-by-side.  You want to use that tool and focus on the total number that you will spend.  Too often, Medicare beneficiaries will focus on one co-pay or an initial deductible.  The bottom line is the total amount coming out of your pocket.

Medicare.gov Medication Calculator

That being said, we all have limited budgets.  A big deductible may be too big for your wallet.  It may make sense to use a Part D plan without a deductible to even out your costs over the year.  If you are going on a Part D plan more than half way through the year because you just turned 65, it may make sense to pick a plan with no deductible.  Why pay the big deductible and turn around and pay it again in January?  That is why it is important that your agent go through your list of medications, talk about the costs, and figure out the best plan for you.  An experienced agent should be able to effectively use the Medicare prescription drug calculator to show you how your medication costs will play out in the coming year.  Also remember to check whether you qualify for the EXTRA HELP Program.

Medicare Changes Part B Deductible

Medicare changes came out in December.  The Medicare changes Part B deductible was an increase.  The Medicare Part B deductible for 2016 was $166.  The 2017 Part B deductible is $183.  While the $17 increase is small in dollar terms, it was a 10% increase.  That’s big! 

Part B Deductible

What is the Medicare Part B deductible?  Medicare Part A and Part B have various deductibles and co-insurance costs that you pay.  While Medicare covers the majority of medical cost, you have some significant responsibility, especially if there are frequent and/or high dollar medical need.  Part B covers doctors visits and outpatient procedures, which is everything other than the hospital.  Medicare will cover 80% of those costs.  Your portion is 20%, but before the 20% starts, you have an annual deductible.  The key to the Part B deductible is that it is an annual deductible.  You pay the Part B deductible only once per year, which is different from the Part A hospital deductible.

Plan G Vs. Plan F

Medicare Supplement Plan G is becoming the most popular supplement plan available.  Plan G covers all the Medicare Part A deductibles and Part B co-insurance EXCEPT the Medicare Part B deductible.  You pay that directly to the provider after the Medicare discount.  Once that is satisfied for the year, you pay nothing else out of pocket.

You may ask, ‘why don’t I do Plan F where the Part B deductible is also covered?’  If you were on a Plan F, your monthly premium would include the cost of the Part B premium and the increase.  You also would pay a substantial fee to the insurance company for them to write the check for $183 for you.  By being on Plan G as opposed to Plan F, you avoid the sizeable annual increase and the additional fee for paying the Part B deductible.

While the Medicare changes Part B deductible was not large in dollar terms, the reality is the cost of Medicare will continue to rise along with all medical costs.  It is important to have an agent who can help you understand your plan and find the plan that best fits your needs at the lowest cost.  Give us a call at 402-614-3389 for a free evaluation.

Medicare Changes Part A Deductible

Medicare changes for 2017 came out in December.  One of the changes was for Medicare Part A.  Part A is the hospital side of Medicare.  It does not cost anything because you paid the Medicare Part A premium during your working years.  It was part of your payroll taxes.  The premium is zero if you have enough quarters of work and paid in to Medicare; however, Medicare Part A has a deductible.  The deductible was $1,288 for 2016.  The Part A deductible for 2017   is $1,316.

Remember the Medicare Part A deductible is for each event within a 60 day period.  If you revisit the hospital 61 days later OR there is a different and separate event resulting in admittance to the hospital, you pay the $1,316 again.

Increases Passed On To You

The significance of the increased Part A deductible will be an increase in the cost of your Medicare Supplement.  Most Medicare supplements cover the Part A deductible as many times as it may occur in a given year.  Because the insurance company will now be on for more deductible, it will have to offset that expense and risk with higher premiums.  Your premium may not increase significantly, but it does cost the insurance company more.  Consequently it will ultimately cost you more.

Medicare Advantage Is Different

For those on Medicare Advantage plans, you are not directly effected.  Your hospital co-pays, as well as the other co-pays, are determined by your individual plan.  They are already set for 2017.  Any increases may result in increases in hospital co-pays down the line because, like supplements, someone needs to pay for the additional expense.  The actual co-pay is determined  by your Medicare Advantage plan, and they are now set for 2017.  Check the changes to your Medicare Advantage plan for 2017.  You received your notification of changes in October.  If you cannot find it, call the customer service phone number on the back of your card.  They will send you a new statement of understanding with all the 2017 co-pays, deductibles, and co-insurance.

Consult with your agent or give us a call to see how any changes to Medicare may affect your situation.