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2016 Changes To Medicare

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If you are currently on Medicare or will be soon, you need to be aware of changes to the system that will be taking place in 2016. For some Medicare recipients, these changes will mean a substantial rise in their Medicare Part B premiums and other costs. Because the changes are extensive, protecting yourself with good medicare supplement insurance will be more important than ever.


Social Security recipients were unhappily surprised to learn that they would not be receiving their usual cost of living adjustment (COLA) in 2016. However, this development may actually save some people money on the increased Medicare B premiums. For the 70% of seniors who have their Part B premiums taken directly out of their Social Security check, a little-known "Hold Harmless" clause will kick in. This clause says that if there is no COLA during a year, Medicare cannot receive a raise, either. However, the 30% who pay their premium directly will be paying over $50 more a month in premiums. Also, anyone who starts participating in Medicare during 2016 will also pay the higher premiums unless Congress takes action. 


As things stand now, the annual Medicare Part B deductible is also expected to rise next year from $147 to $223, a 52% increase. Everyone would be subjected to this increase since the "Hold Harmless" clause does not apply to deductibles. 

Medicare Supplement Plans

The increase of Medicare B costs means that you need to add or reevaluate a Medicare Supplement or Medigap plan. The level of coverage you have had in the past may not suffice considering how much more Medicare will be costing in the future. These plans can help pay copayments, coinsurance, and deductibles that Medicare does not cover. The monthly premium for such a plan is often well worth the investment, costing you much less in the long run. "Leftover" Medicare costs can be devastating.

Unless the government comes through to bail out seniors, 2016 may be a rough Medicare year for some. By preparing now, you can be ready to meet the new financial challenge. If you have a Medigap policy, consult with an insurance broker to see if it is the best one for your needs. If you do not have a Medigap plan, consider investing in one now. The money you save can make a significant difference in your standard of living for the coming year. For more information about supplemental insurance, visit Brown & Brown of Prescott.