First things first: Do NOT put a phalaenopsis in regular potting soil! They grow in trees as epiphytes in nature, so their roots grow in the little bit of leaf litter or moss that collects around the roots. There are terrestrial orchids that grow on the ground, but even they usually grow in the top layer of fluffy organic matter at the surface.
It is probably a good idea to repot. Most people here repot whenever they get a new orchid, whether they think it needs it or not. You can get more sphagnum moss or you can use fir bark chips, coconut husk chips, or other media. Everyone has their own preferred mixes for their environments, so as you gain experience, you'll learn what works best for you.
The spike looks like it is completely, totally dead. It won't rebloom from that spike, but with proper care and patience it will start growing a new spike. It may take a while, but you'll get there. I rescued a phal much like this one, very underwatered, and it grew another spike a few months after I got it. That one got knocked over and broken by my clumsy brother
but it made another spike the next year and bloomed beautifully. Patience is the key.
One more thing, when you water it, let it drain completely. Don't let it sit in a tray of water and don't get water in the center of the leaves. If you do, roll up a thin strip of tissue and wick the water out. Otherwise, you could get crown rot and lose the orchid.
, I agree the spike is dead and needs to be cut off, I also think it is a good idea to repot. Generally all potting medium decays in a year or two, so it seems the phal is overdue for new medium. Personally I have never had good luck with sphagnum moss and I like the bark mix, but that is strictly a matter of use whatever works for you! Here are two good links for how to repot phals: 
Hybrid Mode
