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Life Health > Life Insurance

Feds Change Medicare B Premium Rules

By Allison Bell

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The Social Security Administration (SSA) is changing the rules governing charges for the Medicare program component that pays for doctors’ services, diagnostic services and medical supplies.

The SSA made the changes in a Medicare Part B interim final rule published today in the Federal Register.

The changes, which take effect today, could help cut Medicare Part B costs for some Medicare enrollees affected by disasters such as the loss of an income-producing property due to fraud or the failure of a pension plan.

The SSA charges higher-income enrollees extra for Medicare Part B coverage.

The government usually uses income and tax filing status information from 2 years earlier to adjust the Part B rates.

Enrollees affected by specific types of “major life-changing events” can ask SSA officials to use newer income information.

Before the new rule came out, the official list of life-exchanging events included only marriage, divorce, death of spouse, the annulment of a marriage, a work stoppage, reduced hours at work, reductions in income due to certain losses of income-producing property, a scheduled cessation of a pension, and a reduction in or loss of income from an insured pension plan due to termination or reorganization of the plan.

“Under our current regulations we do not consider events that affect expenses but not income, or that result in the loss of dividend income, to be major life-changing events,” officials write in a preamble to the regulations.

In some cases, dying employers have skewed beneficiaries’ income figures by making lump-sum payments in lieu of continuing to offer pension or retiree health benefits, officials say.

SSA officials have solved that problem by adding “receipt of a settlement payment from an employer or former employer” to the life-changing events list.

“To qualify as a major life-changing event, a settlement payment received by a beneficiary or the spouse of a beneficiary must be the result of an employer’s or former employer’s closure, bankruptcy, or reorganization,” officials say.

The SSA also will add “the loss of investment property as a result of fraud or theft due to a criminal act by a third party” and termination of any pension plan – not just an insured pension plan – to the life-changing events list.

But the SSA also is adding guidelines stating that “the loss of income-producing property due to the ordinary risk of investment is not a major life-changing event,” and that “we do not consider events that result in the loss of dividend income as the result of the ordinary risk of investment to be major life-changing events.”

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