If you are nearing retirement age or already receiving Social Security benefits, it’s important to stay on top of any changes that may be occurring. Currently, there are some 60 million recipients, a number that grows by 10,000 daily (until 2030). Medicare spending by the government hit record highs as of 2016.
The good news is that Social Security benefits are projected to be available until the year 2034 when it will drop to 79% of promised benefits for those aged 45-47 now. The bad news is that Medicare premiums are going up, while the cost of living adjustment (COLA) will only be around 0.2% for 2017. There was no COLA in 2016 because inflation rates did not increase.
Some retirees have already begun to receive letters from the Social Security Administration indicating their cost of living increases will be just a few dollars.
Medicare Hospital Coverage Still Safe
While Medicare Part A hospital coverage will be 100% funded until the year 2028, it comes in at two years fewer than it was projected in 2016, which has many worried that out-of-pocket expenses will be rising in the coming years. Premiums are going up for a portion of Medicare Part B only recipients in 2017, depending on if members are getting a COLA or not. This increase impacts 70% of Medicare recipients, with the other 30% held harmless.
Part B Increases Expected for Top Earners in 2017
The most recent information on Medicare premium increases comes from AARP, The National Committee to Preserve Social Security and Medicare.gov, in which top earners can expect the steepest rate hikes. Increases are expected to be around 22 to 25% up from 2016, focused on Part B premiums. The 30% held harmless by COLA guidelines can expect an increase of $2.70 more a month in 2017. The 70% not held harmless by COLA will increase based on earnings (above $85,000) in the range of $27.20 to $149.00 a month in 2017. Those in the highest income brackets will see the biggest premium increases of $380.20 to $467.20 a month.
Medicare Part D, coverage for prescription drugs, is expected to increase from $34 to $40 per month, and the deductible will increase from $360 to $400 annually.
Lower-income Medicare recipients can expect their states to pick up any additional costs for premiums and out-of-pocket fees.
What Medicare Recipients Can Do to Prepare for the 2017 Premium Increases
According to The Street, there are some things that Medicare recipients can do now to prepare for the projects premium increases for 2017. Seniors are encouraged to work with a financial planner to determine the best use of their retirement incomes, as well as choose the right Medicare Part B product if they are in the $85,000 income bracket or above.
Other ways that seniors can save money on medical and prescription expenses now is to schedule any and all medically-necessary procedures before the end of 2016, to take advantage of lower rates. Many have already reached their annual out of pocket maximum for the year so that medical costs can be covered in full.
Going into the 2017 plan year, seniors are encouraged to find alternative ways of meeting their monthly premiums and out of pocket costs. One way to save money is to find a zero to low-interest credit card that offers cash back for all purchases, and points programs to use for other expenses like travel and online shopping. Medicare recipients can also take advantage of free and low-cost health screenings at local health care centers and clinics. Routine, preventative care can help maintain good health, which can cut down on expensive emergency care and surgeries.
Medicare Part D recipients should take advantage of home medication delivery with 90-day supplies which cuts down on deductibles and transportation costs. For the most expensive or newer brand name medications, seniors can apply for special programs operated by the nation’s largest pharmaceutical companies to get free and reduced cost drugs. Whenever visiting a doctor’s office, ask for drug samples before filling a prescription, an effort that can save you a couple of hundred dollars per year.
When it comes to medically necessary surgeries or other costly procedures, consider clinics outside of the USA that can provide safe medical care at a fraction of US rates. There are many top-rated clinics in Asia, Mexico, Europe, and South America.