Medicare Changes for 2015

This year, there are a few changes to Medicare coverage that will affect millions of enrollees. In general, prices are going up and coverage is growing smaller, although this can vary depending on your medical and financial situation as well as the type of coverage you receive. In some instances and situations, costs are projected to go down in 2015. Here's an overview of what to expect in the coming year.

Your prescription premiums could go up or down-depending on which plan you have. Chances are good that they'll go up, though. Six of the 10 biggest prescription drug plans under Medicare Part D will see their premiums go up this year-anywhere from 11% to 52%. Three of the largest plans will see a decrease in premiums, however, will reduce their premiums by 13% to 31%.

No matter which category you fall into, however, it's important to consider more than the premium when choosing your plan. Some drug plans are going to see increases in copays over 2015; even if the premium goes down, this could mean higher costs for you overall. The Medicare.gov website will help you find the plans that offer the best coverage for the types of prescriptions you use.

The "doughnut hole" is getting smaller. Most prescription drug coverage plans under Medicare have a gap in coverage. This means that the plan stops covering prescriptions after you and your plan together have spent over a certain amount. Coverage kicks in again once you've met another spending limit.

This year, the gap begins once you and your plan have reached $2,960 in prescription drug costs. After that, you have to pay for your medications on your own-but you'll only pay 55% of the full cost on brand-name drugs and 65% on generic drugs in the coverage gap. These discounts are increasing year after year, and are projected to continue doing so until 2020.

Medicare Advantage gets lower government contributions. Medicare Advantage plans are private plans, including HMO's and PPO's, that are funded by the government to provide benefits to consumers that are covered by Medicare.

In 2010, under the Affordable Care Act, the government started reducing its contributions to Medicare Advantage plans, and this has continued into 2015. So far, this has not had the anticipated effect of causing private plans to withdraw coverage under Medicare or scale back the benefits they offer, although this has happened, especially in more rural areas. Only about 5% of people enrolled in Medicare Advantage this year will see their plans canceled.

It does mean, however, that Medicare Advantage plans are getting more expensive. Premiums are rising, however; in 2015, they are expected to rise by an average of 20%. Limits to out-of-pocket expenses and deductibles for Part D medication are both projected to increase.

Your Part B premiums will stay the same. Part B is the part of Medicare that covers the cost of visits to the doctor and outpatient services. Currently, the premium is $104.90 per month, and it is projected to stay the same in 2015. The deductible will also remain the same at $147.

Medicare Part A premiums will drop. Medicare Part A covers skilled nursing facility stays, hospice, a limited amount of home health care expenses, and inpatient hospital costs. Most people don't pay a premium for this part of Medicare; approximately 1% pay an extra premium of $426 per month. For that small category of people, the premium will drop to $407 per month this year.

Medicare beneficiaries do have to pay a deductible for inpatient hospital stays. This year, the deductible amount will go up from $1,216 to $1,260. After you reach that amount, Medicare will provide coverage for the full cost of the first 60 days of your hospital stay.

In general, it's difficult to say whether costs are rising or falling in the aggregate-this depends on your situation and your coverage. However, there are a few optimistic changes this year. First, Medicare Part B coverage isn't rising-this in itself will be beneficial to millions of enrollees. Second, the prescription coverage "doughnut hole" is getting smaller, and discounts for premium costs in the coverage gap are getting bigger. Third, Part D premiums are going down for some plans-although it's important to take this in context with your deductible to see whether it will result in a better deal for you.