Close
ThinkAdvisor

Retirement Planning > Social Security

Groups seek Medicare Part B premium change

X
Your article was successfully shared with the contacts you provided.

A coalition that includes America’s Health Insurance Plans (AHIP), the Blue Cross Blue Shield Association and Families USA is asking Congress to stop a looming increase in Medicare Part B premiums for some Part B enrollees.

The groups want lawmakers to find a way to compensate for the effects of a collision between a cost of living adjustment mechanism and a 1988 “hold harmless” law that keeps increases in Part B premiums from biting into Social Security retirement benefits for most Part B enrollees with annual income below a high-income enrollee cut-off.

If Congress does not change the current law, and Medicare program officials do not find a way to adjust it, monthly premiums for high-income enrollees, enrollees who are eligible for both Medicare and Medicaid, and enrollees who are new either to Medicare Part B or to collecting Social Security retirement benefits will increase 52 percent, to $159.30, the groups write in a letter to congressional leaders, according to a version of the letter posted on the Medicare Rights Center website.

The increase will affect about 30 percent of the Medicare Part B enrollees, the groups say.

Monthly premiums for other Part B enrollees will hold steady at $104.90.

See also: 3 earth shakers from the 2016 Medicare plan announcement

Medicare Part B is a premium-supported program that covers the cost of physician services and outpatient services. Unlike the Medicare Part A hospitalization insurance program, the Part B program does not have a trust fund to support its benefits obligations.

Medicare program managers base Part B premium increases on health care cost inflation, and Social Security managers base retirement benefits increases on the overall inflation rate. Because the overall inflation rate is so low, there will likely be no Social Security benefits cost-of-living increase in 2016 to help absorb the effects of the Medicare Part B premium increase. Because of the lack of a Social Security cost-of-living increase to keep the Part B premium increase from biting into Social Security benefits, only Part B enrollees who fall outside the reach of the hold-harmless law will shoulder the burden of making up for the effects of health care cost increases on the Part B program.

Medicaid programs would have to pay the higher Part B premiums for the “dual eligible” enrollees who are eligible for both Medicare and Medicaid, or else face the possibility that the dual eligibles would lose their Part B coverage.