Changes to Medicare in 2016

Tuesday, January 12, 2016

Two big changes to Medicare – the federal health insurance program for people who are 65 or older – go into effect this year: higher Part B premiums and coverage of advance care planning.

Here is an overview of these changes for 2016, including links to additional information.

Part B Premium Increase
About 30 percent of Medicare beneficiaries can expect to see an increase in their Part B premium this year: from $104.90 in 2015 to $121.80 in 2016. This 16 percent increase is far less than the 52 percent increase initially proposed by Medicare.

Medicare evaluates premiums annually. According to Medicare, the premium increase is due to higher-than-expected Part B spending in 2014; a need to provide for adequate reserves in the Supplementary Medical Insurance trust fund; and the effect of having no cost-of-living adjustment (COLA) for Social Security benefits in 2016.
A majority of Medicare beneficiaries – 70 percent – are shielded from the premium increase due to Medicare’s ‘hold-harmless’ provision. During years when there is no Social Security COLA, the hold-harmless provision essentially freezes Medicare premiums for people who would otherwise see their monthly Social Security benefits drop as a result of the Medicare premium increase. Most people have the Part B Medicare premiums deducted from their Social Security checks. (Source: Kaiser Family Foundation)

For more information about the premium increase, how it was calculated, and who is and is not impacted, click here.

Medicare and End-of-Life Planning
Approximately three-quarters of the 2.5 million people who die during the year in the U.S. are ages 65 and older, making Medicare the largest insurer of health care provided during the last year of life. Beginning this year, Medicare will cover advance care planning—discussions that physicians and other health professionals have with their patients regarding end-of-life care and patient preferences—as a separate and billable service.

During these conversations, doctors and other health care professionals may talk through and help patients plan for a time when he/she cannot make his/her own medical decisions. If the beneficiary has a life-threatening condition, the practitioner may discuss creating a disease-specific plan, help the beneficiary explore his/ her understanding of the illness progression, and discuss his/her own and their family’s hopes, fears, and concerns. They may also talk about care choices during a critical event, and how aggressive they would like their treatment to be (e.g., resuscitation status, antibiotics, and feeding tubes). Diagnosis of a terminal illness is not required in order to qualify for this benefit.

The advance care planning benefit is not one of the free preventive services under Part B. Patients will have to pay the 20 percent cost-sharing (after the Part B deductible) associated with using this service, as they would with other Medicare-covered services. However, if a patient chooses to have this service in conjunction with his/her Annual Wellness Visit, he/she will not have any cost-sharing liability. (Sources: Kaiser Family Foundation, National Council on Aging).

For more information about this new Medicare benefit:
Kaiser Family Foundation – 10 FAQs: Medicare’s Role in End-of-Life Decisions
National Council on Aging – Medicare Coverage of Advanced Care Planning