Medicare Part B premiums are forecast to soar an astonishing 22.3% for an estimated 16 million Medicare beneficiaries in 2017 — the biggest such jump in nearly three decades. The anticipated spike in monthly premiums, from $121.80 to an estimated $149.00 per month in 2017, is primarily due to the effects of an extremely low inflation that’s expected to hit retirees again next year. Medicare Trustees believe that the annual Social Security cost-of-living adjustment (COLA) for 2017 will be insufficient to cover the amount of the Medicare Part B premium increase for the majority of Medicare beneficiaries. That would trigger a special “hold harmless” provision of law.
The hold harmless provision affects Medicare beneficiaries who have their Part B premiums automatically deducted from their Social Security payments. The law protects the Social Security benefits of those people, about 70% of all Medicare beneficiaries, when an increase in the amount of the Part B premium is greater than the amount of increase that individuals would receive in their COLA. The law prohibits a reduction to an individual’s monthly Social Security benefit due to rising Medicare premiums from one year to the next.
The law, however, also shifts the entire beneficiary share of Part B premium costs to the remaining 30% of individuals who are not protected by the hold harmless provision. An estimated 16 million people will take a financial hit from spiking Part B premiums unless Congress takes action. They include:
- People who don’t have their premiums deducted from Social Security payments, including those still working and who haven’t started Social Security yet.
- Individuals with incomes above $85,000, or couples with incomes above $170,000.
- Low-income individuals whose state Medicaid programs pay their Medicare Part B premium on their behalf.
- New Medicare enrollees.
The government will announce the 2017 COLA on October 18, 2016 and it remains to be seen whether Congress will take action to protect older Americans and state Medicaid budgets from unexpectedly high Medicare Part B premium costs. In response to similar circumstances last fall, Congress passed legislation that modified the Part B premium spike to the amount it would have increased if the hold harmless provision had not gone into effect.
TSCL worked hard for the Medicare Part B “roll back” last fall which prevented an even larger Part B premium spike in 2016, and stands ready to ask lawmakers to do the same in 2017. You can help: Contact your Representative in the House and Senators now and ask your lawmakers to take action to stop the Medicare Part B premium spike. Call your lawmakers toll free at 1-844-455-0045 or send an email to your Members of Congress.