First I should mention that the latest tax regulations call for a sizable cut in Medicare's budget. CMS is handling some of these cuts by becoming more efficient by completely overhauling their payment schedule and going to a "Value-Based" from a " Volume-Based" model. The change will take a few years. One major change will be focused on Home Health Care which in addition to its process rules going from being based on quantity to value will be changed from 60 days to 30 days. These changes are planned for years 2019 and 2020.
The good news is the donut hole is going away one year earlier next year instead of the planned 2020 due to President Trumps budget deal. But what does that really mean; beneficiaries will pay 25% of the cost of their prescriptions from the time they enter the coverage gap until they reach catastrophic coverage instead of the 35% that was the original 2019 goal. Congress made it possible to close the donut hole early by requiring certain drug manufacturers to pay more of the costs, 70% (currently brand-name drug companies pay 50%). I wonder what effect that will have on drug costs. The real winners are insurance companies that will only have to pay 5% of costs. I just have one observation to make; why do they say "closing the donut hole", there is still a gap before you get to the catastrophic stage, the cost to the beneficiary is just lower. Hang on it's going to be a wild ride, there are more innovative changes predicted for Medicare in the future.
A change scheduled for 2020 could be more problematic as it concerns medi-gap insurance plans that pay the Part B deductible like the F Plan, the most popular Medicare Supplemental Insurance Plans, which will no longer be sold. I will not go into the obvious complications this can cause many of those currently insured with an F Plan. This is tied to the Medicare Access and CHIP Reauthorization act of 2015 (ensuring that everyone would have some out-of-pocket costs during the year.)