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National Organizations Make Recommendations to Lessen the Impact of Projected Increases in Part B Premiums and Deductibles

This week, 75 national organizations representing older adults, people with disabilities, insurers, health care providers, unions, and purchasers sent a letter to House and Senate Committee leaders highlighting recommendations regarding projected increases in Medicare Part B premiums and the Part B deductible in 2017.

According to the 2016 Medicare Trustees Report, Part B premiums may increase to $149 per month or more for nearly 30 percent of beneficiaries. The trustees also predict that this increase will be accompanied by a hike in the Part B deductible—up to $204 from $166. These projected increases in Part B premiums and the deductible are, in part, due to a predicted nominal Cost of Living Adjustment (COLA) for Social Security recipients in 2017 (as low as 0.2 percent) resulting in the application of the hold harmless provision in the Social Security Act.

Through the hold harmless provision, the dollar increase in the Part B premium is limited to the dollar increase in an individual’s Social Security benefit. Should the trustees’ assumptions hold, roughly 70 percent of Medicare beneficiaries will be held harmless, while the remaining 30 percent will shoulder the cost of the expected premium increase.

Older adults and people with disabilities affected by the projected premium increase include: new Medicare enrollees in 2017; individuals not collecting Social Security benefits; and beneficiaries already paying higher, income-related premiums. Over nine million beneficiaries dually eligible for Medicare and Medicaid are also subject to the higher premiums and state Medicaid programs will bear this cost. Unlike the 2016 Part B premium projections, the estimated increase in the Part B deductible will affect all Medicare beneficiaries.

The organizations that signed on to the letter express deep concern for the projected Part B premium and deductible increases, most notably for current and newly eligible beneficiaries living on low and fixed incomes. In 2014, half of the Medicare population lived on annual incomes of $24,150 or less. Newly enrolled Medicare beneficiaries, those not collecting Social Security benefits—many of whom are retired public servants—and state Medicaid programs should not be expected to carry the burden of paying for increased costs in Part B through higher premiums and cost sharing.

For those reasons, the group urges Congress to advance a solution that will significantly lessen the projected Part B premium and deductible increases in 2017. In particular, they support an extension of solutions to mitigate unprecedented Part B premium and deductible increases in 2016 found in the Bipartisan Budget Act of 2015. They also support extending the protections of the hold harmless provision to all beneficiaries.

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