Here are some important updates for Medicare beneficiaries!
2017 Medicare coverage changes
Changes to be aware of for 2017 include:
Medicare recipients reaching the donut hole will benefit from better prescription drug discounts. The gap in prescription drug coverage (the donut hole) starts when someone reaches the initial coverage limit ($3,700 in 2017), and ends when they have spent $4,950. Prior to 2011, Medicare Part D enrollees paid the full cost of their medications while in the donut hole. But the ACA has been steadily closing the donut hole, and it will be fully closed by 2020. At that point, enrollees will pay just 25 percent of the cost of their drugs all the way up to the catastrophic coverage threshold. For 2017, while in the donut hole, enrollees will pay 40 percent of the cost of brand name drugs (down from 45 percent in 2016) and 51 percent of the cost of generic drugs (down from 58 percent in 2016). The Medicare Part D deductible will be $400 in 2017.
- Medicare Part B premiums will increase for those who didn’t see an increase in 2016. In 2015, most Medicare Part B enrollees paid $104.90/month for their Part B premium, although enrollees with income above $85,000 had higher premiums. For 70 percent of Part B enrollees, their premiums are deducted from their Social Security checks, and net Social Security checks cannot decrease from one year to the next. Since there was no cost of living adjustment (COLA) for Social Security in 2016, Part B premiums couldn’t increase for those enrollees (otherwise it would have resulted in a smaller net Social Security check, which is prohibited by law). But Part B costs increased, which meant premiums needed to increase for the rest of the enrollees. Ultimately, Part B premiums ended up at $121.80/month for enrollees whose premiums are not deducted from their Social Security checks, and for people who are new to Medicare in 2016. But 70 percent of enrollees are still paying $104.90/month (high-income enrollees pay additional premiums). For 2017, there’s expected to be a COLA for Social Security, so the $121.80/month Medicare Part B is expected to apply to all enrollees, with higher premiums for high income enrollees.
- Medicare Advantage plans continue to see changes. While healthcare reform is slowly reducing rebates paid to Medicare Advantage plans, these plans continue to be popular. 30 percent of Medicare recipients were enrolled in a Medicare Advantage plan in 2015 – a significant increase from the enrollment total in 2009 when the ACA was signed into law. Most people will continue to have dozens of Medicare Advantage plans as well as Part D plans available to them. However, these providers can change the coverage options they offer from year to year so it’s important to stay up-to-date.
Most Medicare beneficiaries should received their Annual Notice of Change (ANOC) and Evidence of Coverage (EOC) from their existing Medicare Advantage and Medicare Part D plan providers by Sept. 30. CMS will make information available to the public on Medicare.gov in October. The Medicare website is also a tremendous asset for individuals with questions about Medicare rules, timelines, Medicare Part D, etc.
It’s important to carefully review the information sent to you by your plan provider, since this will cover any possible changes. For example, increasing co-pays, changes to drug formularies or changes to treatment coverage. Once open enrollment gets underway, you can make changes that reflect your current health coverage needs.