Medicare Premiums May Soar as Social Security Payments Stay Flat

[mahatmakanejeeves]

Source: New York Times

By Robert Pear OCT. 15, 2015

WASHINGTON — The 60 million people on Social Security will not receive any cost-of-living increase in their benefits in 2016, the government said on Thursday, but because of a quirk in federal law, nearly one-third of Medicare beneficiaries could see record increases in their premiums unless Congress intervenes.

With millions of older Americans on fixed incomes facing that one-two punch, the Obama administration is urging Congress to moderate or stop the health insurance premium increases, which could raise the cost for some Medicare beneficiaries by about 50 percent — the largest increase, by far, in the history of Medicare. But the House’s leadership crisis could prove to be an obstacle.

Social Security has provided automatic cost-of-living adjustments in every year since 1975 with two exceptions, 2010 and 2011. But inflation was extremely low in 2015, leading to another benefit freeze, Social Security officials said. Gasoline prices, in particular, have declined sharply, holding down overall prices in the economy.
....

But that overall trend is not saving the health care sector, where costs are once again climbing with the greater use a of medical services by an aging population. Cost increases are often driven by new technology and expensive prescription drugs. Medicare needs additional money to help pay for Part B of the program, which covers doctors’ services, outpatient hospital care and some prescription drugs.

Read more: http://www.nytimes.com/2015/10/16/us/politics/medicare-premiums-social-security-cost-of-living.html

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Previously at DU: Medicare Premium Could Soar Next Year

[hobbit709]

1. Like a few years ago when my mom got $9/mo more and Medicare went up $55/mo.

[LiberalArkie]

2. I figured it out. Gas is cheap. Now if I can drive from Arkansas to Canada and buy my meds there

I should be able to offset the price increases. As long as the car doesn't break, or I have an accident..

[jtuck004]

3. This could easily be as fatal for the incumbents as gas prices. n/t

[Tarheel_Dem]

4. Time for Congress to get to work. nt

[NotHardly]

5. Congress getting to work...

good luck with that. (the part about getting Congress to do anything, let alone anything positive for actual people)

[Geronimoe]

6. This would mean

This would result in 1/4 of mother's social security going to pay for health insurance. With not enough left over to afford living expenses.

Very few elderly exit with any assets left. The bankers, Wall Street, and medical industry gets all assets prior to death.

[enough]

7. 70 percent of Medicare recipients would not be affected, according to the article.

snip from article>

About 70 percent of Medicare beneficiaries will be protected against higher premiums in 2016. Under federal law, Medicare premiums are linked closely to Social Security benefits, since most people on Medicare have their premiums deducted from their monthly Social Security checks. To protect older Americans, federal law stipulates that, in most cases, the increase in a person’s Medicare premium cannot exceed the increase in the person’s Social Security benefit. The purpose of this “hold harmless” provision is to prevent a reduction in Social Security benefits.

But by shielding 70 percent of beneficiaries from rate increases, that same law exposes the remaining 30 percent to major price shocks. Medicare actuaries predicted in July that the standard premium for those beneficiaries would rise next year to $159 a month, from just under $105 a month for most beneficiaries, the same as in 2013 and 2014.

Premiums are supposed to cover about one-fourth of the projected cost of Part B of Medicare, with general revenues accounting for the remainder. If premiums are frozen for 70 percent of beneficiaries, higher overall Medicare costs must be spread across a smaller group of people.

That smaller group, more than 15 million strong, includes some high-income Medicare beneficiaries who are already required to pay higher premiums; low-income people eligible for both Medicare and Medicaid; beneficiaries who are new to Medicare in 2016; and those who do not receive Social Security checks.



snip>