Medicare and Social Security Update:
What You Need to Know for 2016

Medicare beneficiaries received some good news during the recent federal budget negotiations. Due to the fact that there is no Cost of Living Adjustment (COLA) for 2016, coupled with an increase in Medicare Part B premiums, 2016 monthly Social Security payments would have been smaller in 2016. But a last minute budget deal prevented that calamity. The budget that passed and was signed by President Obama did not include any Social Security (COLA) increases, but it did remove or delay the Medicare Part B premium increases for the majority of seniors. The net result: most seniors will not see a decrease in their monthly payments.

Additionally, Americans receiving Social Security Disability payments were spared a potential 20 percent decrease for 2016 due to a long-standing deficit in the fund. That’s because, of the 12.4 percent combined employee and employer contribution to the Social Security trust funds only 1.8 percent is allocated to the disability fund. Congress alleviated some of the burden by increasing this contribution to 2.37 percent over the next three years, giving Congress time to come up with a long-term solution.

According to Cristina Martin Firvida, Director of Financial Security and Consumer Affairs at AARP, nearly 70 percent of the disability fund beneficiaries are over 50 years old. Considering that major depressive disorder is the leading cause of disability in the United States, this budget deal will have potential positive effects for persons living with mental health conditions today and into the future.

Expect to pay more for medications
On average, more medications are being placed on higher formulary tiers, which could result in greater out-of-pocket costs as well as limited accessibility. According to the Avalere Health 2016 Medicare Part D Formularies Initial Analysis white paper, seniors can expect to pay more for medications in 2016. These larger out-of-pockets costs can be attributed to increases in the

  • premiums for prescription drug plans
  • coinsurance for medications
  • number of tiers in the plan.

Similar increases are being seen for Medicare Advantage (MA) plans. Eighty percent of the MA plans have a five-tier formulary and 26 percent of the plans now have a coinsurance requirement—up from 17% in 2015.

Medicare Formulary Improvement Act needs your help.
Congress continues to lack the political will to provide a permanent legislative fix to Medicare Part D protected class status for antidepressant, antipsychotic, and immunosuppressant medications. As reported in past CFYM posts, the Centers for Medicare and Medicaid Services (CMS) announced plans to remove these vital medications from protected class status. This could mean that individuals living with a mental health condition would not have access to all of the medications available to treat their disorder. CMS would decide which medications would be covered.

There is now a bill in Congress that would mandate that CMS retain the protected class status for these medications. But simple procedural rules are keeping the Medicare Formulary Improvement Act from moving forward. Before a bill can be passed, it needs to receive a “score”. The assigned score reflects the legislation’s budgetary impact. Because these medications already enjoy protected class, legislation awarding them this status permanently should have no effect on the budget one way or the other.

Although the bill has sponsors, no one has stepped forward to request that the bill be scored. Please take a moment today to write your Senators and ask them to support scoring the Medicare Formulary Improvement Act.

Your Turn

  • How will you make sure you have access to vital mental health medication through your Medicare Part D plan?
  • What steps should Congress take to ensure that unobstructed access to mental health medication is guaranteed?

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2 comments
Christine Berkland
Christine Berkland

Shared! Now if I could only focus to write my senators & representatives.

fishera
fishera

I did not sign up for Part D of Medicare when I turned 65 as I was not taking a lot of meds.  So it is really important to address the penalties I would face if i were to sign up for Part D now, which I am not going to do.  I don't know if folks know that there is a 1% penalty for every year I didn't take Part D, which is now 9 yrs. and will soon be 10 yrs.  What I learned from Medicare is that my penalty would be about $38+ dollars EACH MONTH added onto my supplement to Medicare.  That comes to about $400-$500 every year until I die just for the additional costs to get Part D.   We must get rid of this penalty for Medicare pts.  Regarding Medicare Advantage Plans, as I can no longer pay the increasing premiums to my Medicare supplement, they average about $45.00 dollars each month for Tier 1-2 along with their high deductibles when admitted to a hospital for whatever reason - i.e. about $4500.00 dollars.  The Medicare deductible for 2016 has gone up to $160. For 2015, it was $147. dollars.  so do the math and decided what is your best option. 


This is totally unacceptable that there is a penalty for not initially signing up for Part D and for pts. who do take a lot of meds and did sign up for Part D, they are now being faced with the "donut hole".  since I was doing contracting work and not working for a non-profit which gave me health insurance, I was on my own.  the same would be true for folks in private practice and/or having their own business, no matter what.

Medicare premiums are out of control and yes, we can blame the insurance companies and lobbyists, but its also time to point the finger at our elected officials who don't know about this penalty and/or could care less.

afisher