There are close to 11,000 Baby Boomer individuals turning 65 and eligible into Medicare each day here in the US. If you are close to retirement you may want to take note of the proposed changes to the Medicare entitlements. Medicare Part A – Hospital Insurance – comes automatically when you turn 65. Part A has no cost for individuals who have fully qualified through their/or their spouse’s 40 work quarters requirements. The second leg of Medicare is the Part B – Medical Insurance. This coverage has a cost of $104.90 a month in 2015. There is a discussion in Washington at CMS and HHS proposing a cost increase for 2016 on the Medicare Part B premium to $159 per month. If you act quickly you may be able to lock-in the lower price for life, but again you have to act quickly. Here are a few tedious scenarios to consider.

• It is very common, if you are 65 or older, currently working at a business that has 20 or more employees, you likely have not turned on your Medicare Part B because and the group insurance has remained as your primary health coverage. It is also common for these 65 year old individuals will delay taking their social security income pension because they are currently working and full pension benefit comes at age 66. Up to this point you have been saving the $104.90 for Part B premium each month because it was not necessary. However, if you turn on the Part B in 2015 and have this deducted from your social security benefit check, you can lock-in the lower premium for life. The key here is current social security pension beneficiary have no Cost of Living Adjustment increase for 2016. So those who are currently collecting their benefit check also have a “hold harmless” provision that prohibits the HHS increasing Medicare cost.  

• Secondly, if you are currently retired, and already have Part A and Part B in force but not taking your social security benefit check you are currently billed quarterly the $104.90 premium. If you start drawing your social security benefit check and have the part B premium pulled from your check in 2015, you can avoid the Part B 2016 premium increase due to the hold harmless provision.  

Confused Yet? Simply stated, there is no Social Security income COLA increases in 2016, therefore there is no Medicare Part B premium increases for current beneficiaries in 2016. Please consult us here at Thomas & Associates for a complete review of the Medicare Insurance Options and health coverage needs for 2016.