Congress Passes Medicare ‘Doc Fix’

June 11, 2015

Uncategorized

What might become the most significant Medicare reform in years was just approved by the Senate, commonly referred to as the Medicare Doc Fix.
It’s ultimate goal is to fix the federal formula for paying physicians which is called the Sustainable Growth Rate (SGR)
SGR – which was first ratified in 1997, ensures that doctors’ compensation from Medicare services will increase along with natural inflation.
Without new legislation, compensation for physicians would drop 21% through Medicare.

This new legislation will be phased in over the next few years and will fix the formula that will encourage and reward doctors who provide high quality and cost effective care. This also encourages the doctors to continue to accept Medicare, now that it will pay better.

Medicare beneficiaries should expect higher costs with the new reform. Medicare Supplement plans C and F (two most popular plans) will not cover the annual Part B deductible for new enrollees starting with new enrollees in 2020. The current deductible is $147.

The goal is to give seniors more “skin in the game,” which many have long argued would lower costs by making patients think twice about using medical services if they know they must pay something for all services they use. Starting in 2018, the new plan will shift a higher percentage of costs to Medicare beneficiaries with Modified Adjusted Gross incomes (MAGI) between $133,500 and $214,000 (twice that for couples). Those with MAGI of $133,000 to $160,000 would pay 65 percent of total premium costs, rather than 50 percent today and those with MAGI between $160,000 and $214,000 would pay 80 percent, rather than today’s 65 percent.

In summary, expect your Medicare Part B premiums to rise in the coming years due to new MAGI income thresholds as well as greater payment obligations being given to Medicare providers, and know there will be some pressure to lower benefits for some Medicare Supplement plans starting in 2020.

-Facts based on  Mark Miller’s column in Newsday June 7th, 2015.

Congress Passes Medicare ‘Doc Fix’