How the New Medicare "Doc Fix" Law Will Affect Older Americans


Legislation to remedy one of Medicare's most troublesome ongoing issues—the Sustainable Growth Rate (SGR) formula used to calculate doctor payments—has passed the Capitol Hill gauntlet and was recently signed into law by President Obama.

Though much has been made about how the new law (Medicare Access and CHIP Reauthorization Act of 2015) will change how doctors and other health care providers are reimbursed for services rendered to older adults, the law will also have a significant impact on individual Medicare beneficiaries.

  • The more you make, the more you pay: The "doc fix" doesn't come cheap, and some older adults will be asked to pay more for Medicare to help cover the law's $200 billion estimated price tag. Beginning in 2018, individuals who make $133,501 (or couples who make $267,001) or more per year will pay higher monthly premiums to obtain Medicare coverage. However, even with these changes, the Congressional Budget Office estimates that the bill will pile an additional $141 billion onto the federal deficit.
  • New beneficiaries get less Medigap: Beginning in 2020, new Medicare beneficiaries won't be able to obtain Medigap plans that cover the yearly deductible ($147 in 2015) for Medicare Part B (medical insurance).
  • Medicare cards get a much-needed makeover: The ongoing debate over whether Social Security numbers should be stricken from beneficiaries' Medicare cards is over: the numbers must be removed. But the change won't be instantaneous. The law gives Medicare four years to start offering cards sans Social Security number to new beneficiaries when they sign up, and eight years to reissue revised cards to current beneficiaries. One of the biggest challenges of implementing this change is the cost. Congress has given the green light for $320 million to be allocated to the effort.
  • Medicare doctors will be rewarded for quality, not quantity: The new law will nix the much-maligned, traditional fee-for-service method of Medicare physician reimbursement, and replace it with a payment system that rewards quality care a doctor provides versus the quantity of procedures and tests they administer. Over the next five years, while the new system is being implemented, doctors who participate in the government program will see a .5 percent pay increase each year. Long-term, the goal is that this new method of payment will result in more collaborative, coordinated care for aging Americans.

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