The 2016 Medicare Open Enrollment Period (OEP) begins on Oct. 15. Overall, 2016 prices are expected to remain stable. But when comparing costs, this is really a discussion of Part B (medical insurance) and Part D (Prescription Drug Plans).
Most enrollees don’t have to pay for Part A (hospital insurance). But for those who do, prices should be the same as 2015. For Medicare Part C (Medicare Advantage, or MA), these are policies sold by private companies. Therefore, all costs vary, depending on specific plans.
For Part B (medical insurance), as the government has not yet released its official 2016 rates, costs are pending. However, the monthly premium has been $104.90 for the past few years. And in regard to Medicare Part D (Prescription Drug Plans, or PDPs), there is good news. According to the Centers for Medicare and Medicaid Services (CMS), PDP costs will increase very little.
2016 plan costs in detail
Medicare Part A – Again, most beneficiaries receive “premium-free” Medicare Part A. But certain individuals under the age of 65 may also qualify, particularly those who have received disability benefits for 24 months. If you have not worked the mandatory 40 quarters, you will have to pay for Part A coverage. 2016 costs, which are similar to 2015, are as follows:
- $0 if you or your spouse worked and paid Medicare taxes for 10 years or more in the U.S. (40 quarters or more)
- $224 if you or your spouse worked and paid Medicare taxes between 7.5 and 10 years in the U.S. (30-40)
- $407 if you or your spouse worked and paid Medicare taxes for fewer than 7.5 years in the U.S. (30 or less)
Medicare Part B – The expected 2016 costs for Part B are pending. However, in both 2014 and 2015, the monthly premium was $104.90 and the deductible was $147. These costs have been unchanged for the past two years.
Medicare Part C (Medicare Advantage) – Again, MA Plan costs – including monthly premiums, deductibles, copayments and coinsurance — vary by plan. But there may be good news, as the CMS states that for 2016, MA Plan payments should only increase by about 1.25 percent. For a wide array of MA Plan options, click on this website, HealthNetwork.com.
Medicare Part D – The CMS prices has revealed that for 2016, companies carrying Plan D Prescription Drug Plans (PDPs) expect average monthly Medicare Part D premiums to be around $32.50. These premiums vary, due to such factors as consumers’ plan benefits and states. PDP costs have been steady over the past few years (see table); in 2015, premiums were $32 and in 2014, they were $31.
However, there will be some Part D-related changes for 2016:
- Initial deductible – For 2016, it will be $360; in 2015, it is $320
- Initial coverage limit – For 2016, it will be $3,310; $2,960 (2015)
- Out-of-pocket threshold – For 2016, it will be $4,850; $4,700 (2015)
- Coverage gap (the donut hole) – This temporary coverage gap in most PDPs starts once your Part D initial coverage limit is met; $3,310 in 2016. In 2016, it will end when you spend a total of $4,850.
- Brand-name drugs – In 2015 and 2016, Part D enrollees receive a 55 percent discount on total costs of brand-name drugs purchased while in the donut hole.
- Generic drugs – Part D enrollees will receive a 42 percent discount on generic drugs purchased while in the donut hole; in 2016, this will be 35 percent.