Apr 20, 2015

Part B Deductible Coverage to end as part of new "doc fix" legislation

The so-called Medicare "doc fix" (officially the Medicare Access and CHIP Reauthorization Act of 2015) was signed into law by President Obama on April 16. A rare instance of congressional bipartisanship, it replaces the 1997 law that caps Medicare payments to physicians. Each year since 1997, that law sent Congress scrambling to prevent doctors' reimbursements from being slashed. Under the new law, payments to participating doctors will increase by .5% each year, through 2019. The projected cost over the next 10 years is $200 billion.

Not surprisingly, some of that cost - about $70 billion - will come from seniors' pockets. Here's what you can expect: 

If you sign up for Medicare starting in 2020, you will no longer be able to get a Medigap policy offering coverage of the Medicare Part B deductible (the current deductible is $147). Those who are currently covered by Medigap policies, and new enrollees up to the year 2020, will not be affected. Proponents of the legislation argue that this provision will save the government money by providing seniors with a financial incentive to seek outpatient care only when it is truly medically necessary. Critics claim that seniors will put off getting needed care, costing Medicare more money in the long run. 

If your adjusted gross income exceeds certain limits, you will also have to pay higher Part B premiums.  Starting in 2018, if you have a modified adjusted gross income between  $133,000 and $160,000 you will be required to pay 65% of Part B premiums (current payment is 50%). If your income is between $160,000 and $214,000, you will pay 80% of the Part B premium (current payment is 65%).

Read more about the law and how it will affect Medicare beneficiaries here and here.

By the way, the doc fix law also fixes something else, and it's good news for everyone concerned about identity theft: Social Security numbers will no longer be displayed on Medicare cards. We do not know the exact date new cards will be issued, but the date must be within four years of the passage of the law (in other words, by April 16, 2019). New Medicare beneficiaries will receive cards that don't display the number, and current beneficiaries will be issued updated cards.

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