Medicare Premiums To Rise for Some Beneficiaries in 2016
While the majority of Medicare beneficiaries will see no changes in their monthly premiums for outpatient care in 2016, premiums for new beneficiaries will increase, AP/Modern Healthcare reports.
The Obama administration announced the Medicare premium rates for 2016 on Tuesday.
By law, Medicare Part B premiums are set to cover one-quarter of the cost of beneficiaries' outpatient care. The premiums are paid by most of the program's 55 million beneficiaries, whose payments generally are deducted from their Social Security benefits. Higher-income beneficiaries pay higher premiums (AP/Modern Healthcare, 11/10).
Meanwhile, federal law mandates that premiums for Medicare beneficiaries who also receive Social Security benefits cannot rise at a higher rate than increases in their Social Security benefits (California Healthline, 10/15). Because there will not be a Social Security cost-of-living increase next year, most beneficiaries' premiums will not change (AP/Modern Healthcare, 11/10). Medicare beneficiaries who do not receive Social Security benefits are not protected from the increases. In addition, other individuals who are not protected from the increases include those who:
- Are newly enrolled in Medicare;
- Have high incomes; and
- Qualify for both Medicare and Medicaid (California Healthline, 10/15).
President Obama last week signed into law a two-year budget deal (HR 1314) with a provision that lessens, but does not eliminate, the premium increase for affected beneficiaries. Funding to offset portions of the projected increases will come from a loan to the supplemental medical insurance trust fund. The loan will be repaid through a $3 monthly surcharge on premiums for the 30% of beneficiaries who will experience the increase. Beneficiaries with higher incomes will see larger surcharges.
Changes in Premiums, Deductibles
Under the agreement, monthly Medicare Part B premiums will increase to about $120, rather than to $159, for roughly 30% of beneficiaries (California Healthline, 11/3). Beneficiaries with higher incomes will have monthly premiums ranging from $170.50 for those with annual incomes greater than $85,000 to $389.80 for those with annual incomes greater than $214,000.
Meanwhile, beneficiaries not affected by the increase will continue to pay monthly premiums of $104.90.
However, all beneficiaries will experience about a $19 increase in deductibles (AP/Modern Healthcare, 11/10). Under the budget agreement, annual deductibles will increase to about $167, rather than to $223 (California Healthline, 11/3). Current deductibles are $147 annually. The change marks the first increase in deductibles since 2013 (AP/Modern Healthcare, 11/10).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.