Got Medicare? Get Ready to Open Your Wallet

Recent federal legislation, the Medicare and CHIP Reauthorization Act (April 16, 2015), incorporates additional costs to be paid by Medicare Beneficiaries.

Original Medicare contained two parts, generally Hospital In-patient benefits, (Part A), and benefits for those not hospital confined, (Part B). Later Part C was added, called “Medicare Advantage”, wherein the Medicare Beneficiary contracts with a health insurance company to provide his/her Medicare Parts A & B benefits. Newest Medicare addition is Part D, to help pay some of the costs associated with out-patient prescription medicine.

Most Medicare Beneficiaries pay no monthly premiums for their Medicare Part A coverage, as the Medicare Taxes they paid during their working years are used to partially off-set Part A benefit costs. Medicare Beneficiaries must pay monthly premiums to Medicare for their Part B benefits. Most pay $104.90 per month in 2015, and that amount increases for those with modified adjusted gross incomes above $85,000, if filing income tax returns as “single”, or $170,000 if filing as married filing jointly. Part B monthly premiums for higher income earners can be as much as $335.70 in 2015. Charging higher income earners more simply because they earned more than Joe or Jane Lunch-Bucket is referred to as “Means Testing” by Washington’s bureaucrats.

Such means testing, referred to above, also applies to monthly premiums paid by higher income beneficiaries for Medicare Part D out-patient prescription drug insurance, and can add as much as $70.80 to the base monthly premiums for such insurance this year.

Provisions in the above Medicare and CHIP Reauthorization Act increase sur-charges to Medicare Part B and Part D beneficiaries, and will bump up the basic $104.90 Part B monthly premiums paid by Joe and Jane Lunch-Bucket to an estimated $181.00 by 2025.

Are you a Medicare Beneficiary covered by a Medigap (Medicare Supplement) Plan? Starting in 2020 expect to find a deductible attached to your medigap policy…as much as $217 by 2023. You will be expected to pay that deductible amount before your supplement plan can begin paying out its benefits.

These additional out of pocket costs have been brought to you by your president and your elected representatives in Washington. Please feel free to contact them directly to offer your thanks.

Carpe Diem