Congress Ends Medicare Part B Deductible Coverage

By Ronald A. Fatoullah, Esq. and Stacey Meshnick, Esq.

{2:43 minutes to read} Medicare recipients often buy "Medigap" insurance coverage that will generally cover the deductibles and co-payments that are not covered by Medicare. But as a result of legislation just passed by Congress, starting in 2020, Medigap plans will no longer be allowed to offer coverage of the Medicare Part B deductible, which is currently $147 (in 2015). However, current Medigap policyholders and those buying policies before 2020 will still be eligible for the deductible coverage after that date.

The change is an effort to help pay for the so-called "doc fix" legislation that overhauls the way Medicare pays doctors, which is expected to cost $200 billion over 10 years. Medicare Part B covers doctor visits and other outpatient care, and currently Medigap plans C and F offer coverage of the Part B deductible. The reasoning behind making Medicare beneficiaries pay the deductible themselves is to discourage unnecessary doctor visits. This will save the Medicare system a significant amount of money.

Some argue, however, that if the change prompts beneficiaries to forego needed medical care, they may simply require more expensive care later, costing Medicare more in the end. Critics also say that the change will encourage more beneficiaries to abandon regular Medicare and join Medicare Advantage plans, which will still cover the deductible. By law, insurers are prohibited from selling Medigap plans to Medicare recipients if they are enrolled in an Advantage plan. In recent years, fewer seniors are using Medigap and Advantage enrollment has been rising.

In addition to the Medigap change, affluent seniors (individuals with incomes between $133,500 and $214,000 - or twice these figures for couples) will be required to pay higher Part B premiums beginning in 2018 as a result of the legislation. In addition, the regular Part B premium will rise faster than under current law. It is advisable for seniors to discuss their insurance needs with a knowledgeable advisor.

Ronald A. Fatoullah, Esq. is the principal of Ronald A. Fatoullah & Associates, a law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Stacey Meshnick, Esq. is a senior staff attorney at the firm who has chaired the firm's Medicaid department for over 15 years. The law firm can be reached at 718-261-1700, 516-466-4422, or toll free at 1-877-ELDER-LAW or 1-877-ESTATES. Mr. Fatoullah is also the co-founder of JR Wealth Advisors, LLC. The wealth management firm can be reached at 516-466-3300 or 800-353-3775.