Medicaid-02A new law signed recently by President Obama is expected to fix an underlying discrepancy with Obamacare and Medicare patients, and the rates at which Medicare patients pay their doctors for services.

The Medicare Doc Fix Reform law is the government’s attempt to prevent financial cuts to doctors and their practices if and when they treat Medicare patients. An article on www.wealthmanagement.com explains it:

“The law fixes a federal formula for paying physicians called the Sustainable Growth Rate (SGR). When the SGR became law in 1997, the intent was to keep growth in physician payments in line with the economy’s overall growth. But it’s been a thorn in the side of doctors, who often have faced the prospect of draconian cuts. For example, absent this week’s legislation, payment rates would have been slashed 21 percent. “

While the new law will protect doctors from serious payment cuts for serving Medicare patients, and encourage them to keep Medicare patients as opposed to dropping them altogether, someone still has make up the financial gap for the cost of treatment and service.


And that someone is your client.

Individuals on Medicare are either retired or nearing retirement and this new law increases the cost to the patient who are already on a fixed income. While higher income individuals already pay more for their Medicare than those patients in a lower-income bracket, costs for all will increase across the board.

Currently, more affluent Medicare patients, those earning more than $85,000, incur premium costs between $146.90 to $335.70 monthly while seniors below the $85,000 mark pay $104.90.

Once the new law goes into effect in 2018, the annual income used as a benchmark increases:

“Those with incomes of $133,000 to $160,000 would pay 65 percent of total premium costs, rather than 50 percent today and those with incomes between $160,000 and $214,000 would pay 80 percent, rather than today’s 65 percent.”

The best way to prepare your clients for this increase is to start making plans now for this additional cost. Even if your clients do not fall in the higher income bracket as noted above, an increased cost on a fixed budget must be accounted for ahead of time to ensure your clients’ retirement fund doesn’t fall short.

Michael Canet is a Registered Representative with TCM Securities, Inc. and can offer securities through TCM Securities, Inc., Member FINRA/SIPC.