The annual Social Security cost of living adjustment (COLA) is just 1.3% this year, making it one of the lowest ever paid. But the standard monthly Medicare Part B premium increased by a modest $3.90, from $144.60 to $148.50, much less than TSCL initially feared it would be. TSCL’s efforts to inform Congress and the public about the likelihood of a minimal COLA in 2021, when Medicare costs were rising sharply due to COVID-19, played a part in heading off a large Medicare Part B increase in 2021.
In September of 2020, the Congressional Budget Office estimated that Medicare spending would be twice as high as earlier forecasts made before the start of the pandemic. Well aware that there might be no, or a very low, COLA in 2021, Congress moved quickly to enact legislation that restricted the 2021 Part B increase. Without that legislation, Part B premiums were on course to increase by about $15.60 per month, from $144.60 to $160.20, according to the actuarial document released by the Centers for Medicare and Medicaid Services.
Although Congress restricted the Part B increase once before in 2016, this was the first time that Congress enacted legislation to cap the premium increase prior to knowing what the annual COLA would actually be. Older households have been disproportionately impacted by the coronavirus pandemic, and Congress recognized that a $15.60 per month increase would be more than most beneficiaries could be expected to absorb.
While TSCL was relieved to learn about the restricted Part B increase, concern remains that high costs in 2021 will continue to fuel rapidly growing Part B costs, as beneficiaries start receiving care and treatments that were postponed out of concern for the coronavirus. TSCL believes that our new Congress will be giving Medicare funding and benefits attention in 2021. Please help make the case for keeping Medicare costs in line by sharing your experience with those costs. Please participate by taking TSCL’s 2021 Senior Survey.
Sources: “Medicare Part B Monthly Actuarial Rates, Premium Rates, and Annual Deductible Beginning January 1, 2021,” RIN0938-AU16.