Medicare is made up of several parts, including Medicare Part A and Part B (Original Medicare), Medicare Part C (Medicare Advantage), and Medicare Part D (Prescription Drug Coverage). It’s important to watch out for changes to the costs of the plans within each of these parts and the benefits they offer every year, as they can change. Let’s take a look at what Medicare looks like in 2016.
Medicare 2016 Costs
Every Original Medicare beneficiary pays basic costs that are typically similar across the board. If you elect to enroll in a Medicare Advantage plan instead of Original Medicare, your plans costs can be very different than someone else’s costs. Medicare Advantage plan premiums vary from state to state and insurance company to insurance company. Medicare Part D plan premiums can vary by plan as well. Those with a higher income will pay more for their plan.
Let’s take a brief look at Medicare costs in 2016:
- Medicare Part A Premium Cost: Most don’t have to pay a premium for Part A. If you do purchase Medicare Part A, you may pay up to $411 per month in 2016.
- Medicare Part A Hospital Inpatient deductible and Coinsurance:
- You will have to pay a $1,288 deductible for each benefit period.
- You will have to pay no coinsurance for up to 60 days for each benefit period.
- You will have to pay $322 coinsurance per day from day 61 to day 90 for each benefit period.
- You will have to pay $644 coinsurance per each “lifetime reserve day” after day 90 for each benefit period. Lifetime reserve days are additional days that Medicare Part A will pay for when you are in hospital over 90 days. You can only have 60 reserve days during your entire life.
- You will have to pay all costs when your lifetime reserve days are used up.
- Medicare Part B Premium: The standard Part B premium in 2016 is $121.80, but it can be higher based on your income.
- Medicare Part B deductible and coinsurance: You will pay $166 per year in 2016. When you meet your deductible, you are usually responsible for 20% of the Medicare-approved amount for most services from a doctor, outpatient therapy and durable mechanical equipment.
- Medicare Advantage Premium: The amount you pay per month can vary widely from plan to plan.
- Medicare Part D Premium: The amount you pay per month varies from plan to plan. If you make more money, you will pay more.
Medicare Part D Changes in 2016
In 2016, many Medicare Part D beneficiaries saw rises in their costs, including premiums, deductibles and cost-sharing requirements. Medicare has something called the “Medicare Part D Standard Benefit Plan,” which establishes the minimum allowable benefit for Medicare Part D plans. Here some of the primary changes to the Medicare Part D Standard Benefit Plan costs from 2015 to 2016:
- The initial deductible increased by $40, from $320 in 2015 to $360 in 2016.
- The initial coverage limit increased by $350, from $2,960 in 2015 to $3,310 in 2016.
- The out-of-pocket threshold increased by $150, from $4,700 in 2015 to $4,850 in 2016.
- There was an increase in nominal costs under catastrophic coverage.
- The national base beneficiary premium increased by $0.97, from $33.13 in 2015 to $34.10 in 2016.
Along with these changes in costs, there are also 115 less Medicare Part D plans available in 2016, from 1,001 in 2015 to 886 in 2016.
Medicare Advantage Changes in 2016
More people were enrolled in Original Medicare than Medicare Advantage in 2016, according to The Henry J. Kaiser Family Foundation’s Medicare Advantage Fact Sheet. Of those enrolled in Medicare, only 31% were covered by a Medicare Advantage Plan.
Medicare Advantage plans typically change from year to year since they are sold by private health insurance companies. The average Medicare Advantage premium actually decreased from 2015 to 2016. However, the out-of-pocket limit rose.
In 2016, the average Medicare Advantage Prescription Drug premium is $37 per month. In 2015, this premium was $38. The Medicare Advantage out-of-pocket limit in 2016 is $5,223. This is about 3.6% higher than last year’s out-of-pocket limit, which was $5,041.
What To Do If Your Medicare Costs Are Too High
If you have Original Medicare and your health care needs have changed in 2016 or you are paying too much, you may want to consider purchasing a Medicare Supplement plan. These private insurance plans charge a monthly premium and can help cover the 20% of expenses that you are responsible to pay for.
You may also decide to consider Medicare Advantage plans. These private insurance plans offer the same benefits as Original Medicare, but may come with additional coverage. Medicare Advantage Plan costs vary from plan to plan.
Looking to learn more about Medicare? Visit our About Medicare page to view more general information about Medicare, including details about each of the four parts that make up Medicare.