Question: I have heard there will increased costs for Medicare in 2016. Is this true?
Answer: Unfortunately, yes. For about 30% of Medicare participants, there will be an increase in the Medicare Part B premiums. This 30% includes those participants who do not have the Part B premium deducted from their Social Security check and all new enrollees for 2016. Accordingly, if you are eligible for Medicare, but have not yet enrolled, you should consider enrolling sooner rather than later and opt for the Part B premiums to be paid from Social Security if you are collecting. For those who are not yet collecting Social Security in an effort to maximize their benefit, the savings on the Medicare premium may not be worth collecting Social Security early. The full retirement benefit is available at age 66, however if you delay collecting, the benefit will be even greater. For instance, for each year that you delay collecting Social Security after age 66, there is an 8 percent increase in the benefit. For the 70% of Medicare participants who do have their Part B premium paid out of their Social Security check, the premium will remain the same.
However, all participants will be subject to an increase in the Part B deductible. Part B covers non-hospital care such as doctor visits and outpatient tests or procedures. While some may have a supplemental plan which typically covers the deductible, it is predicted that many companies will force the participants to bear the increased costs.
Lastly, the new year could also bring an increase in Part B which is the part of Medicare that covers prescription drugs. Several plans have already announced plans to raise premiums by 16 to 26 percent. In addition, many plans are including a deductible or increasing existing deductibles.
Navigating the Medicare program is a difficult task. Be sure to speak to a knowledgeable insurance advisor in your area to see what you can do to reduce your healthcare costs.