The Doc Fix and your Medicare Supplement’s Part B Deductible

Part B Deductible

A formula called the Sustainable Growth Rate became law in 1997. It was the government’s attempt to try to address the high costs it incurs for Medicare.  The idea was to create savings for Medicare by keeping the rate of growth of physician’s costs in line with the rate of growth of the overall economy.  But the problem was that every year it threatened the amounts paid to doctors.  It was feared that doctors would stop accepting Medicare and Medicare beneficiaries would not be able to get in to see a doctor. This is why you have a Part B Deductible.

New legislation last year stopped the threat of payment cuts to doctors, by instituting a new plan.  The new plan is based on rewarding doctors for the quality of care they provide instead of the quantity of care they provide.  Sounds good, right?

But the new system comes with costs that will soon be partially met by increases in what seniors will pay for certain Medicare Supplement plans.

Changes to Medicare Supplements

Beginning in 2020 a large percentage of seniors will pay more for their plans.  New Medicare Supplement plans (aka Medigap) will not be allowed to cover the Part B Deductible.  The Part B deductible is $183 in 2017 and goes up regularly.  I have no idea what it will cost in 2020, other than more.

Currently, those who own a C or F Medicare Supplement plan do not have to pay the Part B deductible. It is paid by the insurance company that issued their Medicare Supplement plan.  But this will change in 2020.  C & F plans will no longer be allowed to cover the Part B deductible for new enrollees.  (Older enrollees, those who enrolled before 2020, would not be affected.)

Your costs!

The feds appear to want seniors to have “skin in the game”.  That is, they want seniors to pay a portion of the costs their health coverage.  I guess they figure that if it costs money out of their pockets, seniors might not be as likely to seek health care for minor issues.  And I think they are right.  I think seniors will be more reluctant to seek medical assistance if they have to pay for some of it.

Of course, this cost is in addition to the premiums they already pay for Part B and their Medicare Supplement.  It is also in addition to premium, deductible, and co-pays for their Part D prescriptions.

Looking ahead…

I foresee a problem arising from reluctance to treat minor conditions.  Left unattended, some minor conditions will no doubt develop into more serious conditions.  That, in turn, will require much more medical care and more expense to Medicare.  And that raises the question of What Savings to Medicare?

Jake Young

Individual and Family Specialist