Archive for February, 2016

New Medicare Part B Premium for 2016
You have probably already received a letter from the Social Security Administration notifying you that your Medicare Part B premium for 2016 will be $121.80.
Here is an explanation of the reasons for the increase. Medicare Part B covers outpatient services such as doctor’s visits, x-rays, blood tests, and some medical equipment.
By law, Medicare Part B premiums must cover 25% of the cost of running the program and provide for adequate trust fund reserves. To accomplish this, Part B premiums are set to fulfill the requirement of this law. But, since Social Security recipients have not received a cost-of-living increase, their premiums cannot be hiked. They are protected under the “hold harmless” provision of the Social Security Act and their premiums will remain at $104.90.
The above account for 70% of the people who have their Part B premiums deducted from their monthly Social Security checks. The 30% who are not protected under the “hold harmless” provision includes Medicare beneficiaries who have not yet claimed Social Security, higher-income beneficiaries, those new to the Medicare program, and those who do not have their premiums deducted from a Social Security check (that’s us).
Initially the Part B premiums were to be raised to $159.30 for 2016, but due to a last minute budget deal between Congress and the administration it was set at $121.80. This budget deal involved getting a $7 billion loan from the Treasury Department.
Beneficiaries not protected under hold harmless will pay a $3 monthly surcharge to repay the Treasury loan, which is included in the $121.80 total. Upper income beneficiaries will pay considerably more, ranging from $170.50 a month for individuals making more than $85,000 a year, to $389.80 a month for those making more than $214,000. The amount charged is based on the 2014 tax returns. All beneficiaries will pay $166 next year for their Medicare Part B deductible – up from the current $147.
Medicare Part D, the prescription drug part of Medicare, is also income related and is based on your 2014 tax return.
Many of you question why you must pay for this coverage to two different places. The answer is that your plan premium is paid to the provider, such as to Silverscript, Wellcare, or Blue Cross, etc.
The income-related increase portion is paid to the government. In 2003 then President Bush signed into law the Modernization Act, which stated that beginning in 2007 all Part D Plans, would be income-related and that that extra charge would go directly to the government and not the plan provider, therefore you are required to make out two different checks going to two different places.
NOTE: This material aims only to create awareness, and is not intended as expert or professional advice, nor “endorsed” by CalRTA. Please carefully review with qualified resources and legal advisors prior to acting.
CalRTA IIRG (Insurance Information Research Group)
 courtesy of Gloria Cutshall, Insurance Chair Division 6

Who pays for the drugs 
when you are in the hospital?
I want to bring to your attention an issue that happened to one of our members. Her husband went to the hospital for a heart issue and was classified as an outpatient.
He was given drugs for which he had prescriptions at home (but could not bring into the hospital) and then was billed $1900+ for the medications.
They were also denied coverage by their Medigap plan but are appealing that decision.
This issue is discussed on page 54 of your 2015 Medicare and You book and also on page 61 of the 2016 edition under drugs.
The 2016 edition states: “If the drugs you get in a hospital outpatient setting are part of your outpatient services, you pay a copayment for the services.
“However, other types of drugs in a hospital outpatient setting (sometimes called “self-administered drugs” or drugs you would normally take on your own) AREN’T COVERED BY PART B. What you pay depends on whether the hospital’s pharmacy is in your drug plan’s network.”
The status of one’s classification as a patient in the hospital is crucial. Make sure that your doctor is aware of the consequences of being “under observation” or an “outpatient” in the hospital. I also cannot emphasize enough how important it is to READ your MEDICARE AND YOU book.

NOTE: This material aims only to create awareness, and is not intended as expert or professional advice, nor “endorsed” by CalRTA. Please carefully review with qualified resources and legal advisors prior to acting.

Judy Geppert, CalRTA IIRG

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