The Medicare program is a critical system, one that helps to make healthcare more affordable for seniors. This is true for those that rely exclusively on Medicare for health insurance and for those that have additional private insurance to cover any gaps.
Despite its importance, there is considerable debate about the future of Medicare and potential changes to the program. This is strongly related to the associated financial costs. Medicare is expensive and there are concerns that it is unsustainable in the long-term.
This pattern often means there are changes from one year to the next. However, 2018 brings with it some more dramatic changes, ones that may have more widespread implications.
Some Changes to Expect
Many of the Medicare changes are similar to what occurs each year. Some of these are positive, while others are less appealing. The list below highlights some key changes. You can find more details on these in this article from Forbes.
- There will be a cost of living adjustment of 2%, it is the largest such adjustment to date. This will lead to an average increase of around $27 per person each month. Of course, the precise amount will vary from person-to-person.
- Premiums are also on the rise, with another increase of around $25 per month from the 2017 figure. The balance of these two changes means that many retirees will see little financial benefit from the cost of living adjustment.
- The age for full retirement is also increasing, a topic that has been proposed and discussed for many years. The exact age is influenced by the age of the individual. The age will continue to increase until it hits 67 years for people born in 1960 or later. This will be one of the most concerning changes for many individuals, especially as waiting until full retirement age is often difficult for anyone suffering from chronic conditions.
There have also been changes to the way that social security is managed. Instead of paper statements, most seniors will need to check their information online. This involves first creating a my Social Security account online. Additional security features have also been added to the Social Security website.
The ability to find out information online is a significant advantage. However, it may be challenging for seniors who are not savvy with technology.
Long-Term Changes
There have been other changes as well, including some that may provide more support in the future. The Making Sen$e column from PBS provides more details about these. A few are also discussed below.
- Increases to high-income surcharges. Wealthier enrollees already pay more for their Medicare support. The current changes increase the percentage that such individuals will pay of their actual costs.
- Changes to Medicare Advantage rules. There has been a range of changes to the rules that surround Medicare Advantage plans. One key example is that the plans may be able to provide support for some expenses related to long-term care, which have not previously been possible.
- There have also been changes to the coverage gap in drug plans (also called the donut hole). This was meant to end in 2020 and has been pushed forward a year to 2019.
As a whole, the Medicare changes have mixed implications. Some groups are likely to experience additional support, especially in terms of long-term care. At the same time, other people may find that the changes increase costs.
Some of the changes will also place additional financial burden on the government and on taxpayers. The long-term implications of this aren’t clear, especially in light of the ongoing debate surrounding Medicare costs.
Moving Forward
Potential changes to Medicare have been a discussion point for a long time. However, the changes in 2018 and beyond are some of the largest shifts that have made their way into law.
This pattern strongly suggests that there may be other changes to the program in the future, especially as the implications of this set of alterations becomes clear.
As a result, it’s important for seniors and caregivers to pay close attention to Medicare and to any changes in their premiums and their options. AARP is a fantastic place to turn to for information. Their site regularly provides details about changes to Medicare, including the implications for individuals.
It’s also important to review plans during open enrollment periods, even for people that are happy with their current plan.
This is the best way to be certain that the plan is the right fit. The process may also provide information about any potential changes to fees and coverage that you can expect.
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