Your Weekly Medicare Consumer Advocacy Update
CMS Releases New Part B Premium and Deductible for 2016
Drastic Part B Premium and Deductible Increases Prevented
This week, the Centers for Medicare & Medicaid Services (CMS) announced that starting January 1st, the Part B premium will remain the same for most people with Medicare, amounting to $104.90 per month. For beneficiaries who are not held harmless and protected from premium increases, the standard Part B premium will be $118.80. These beneficiaries will also pay a $3 surcharge, bringing their total monthly cost to $121.80. The Part B deductible will be $166 for all people with Medicare, up from $147.
Thanks to bipartisan action by Congressional leaders and the White House, steep and unprecedented increases in the 2016 Part B premium and deductible were prevented. With no Social Security cost of living adjustment in 2016, many beneficiaries and their families were facing a nearly 50 percent increase in monthly premiums and an increase in their Part B deductible up to $223.
To limit the magnitude of anticipated premium increases, lawmakers agreed to lessen the increase, essentially offering a loan to affected beneficiaries. Over time, this loan will be repaid through the monthly premium surcharge. Half of all people with Medicare live on annual incomes of $24,150 or less and cannot afford stark increases in their monthly health expenses. By spreading the cost of the increased premium over time and bringing down the cost of the deductible, Congress and the White House blunted the impact of an unprecedented shock to Medicare households.
AARP Advocates for Public Information on the Cost-Effectiveness of Prescription Drugs
In a recent blog post on thehill.com, Debra B. Whitman, Vice President of Policy Strategy and International Affairs of AARP, argues for changes to the prescription drug market. Citing continually increasing prices for both new and existing medications, Dr. Whitman urges the health care system to push back against high prescription drug prices.
She provides examples of limited successes–where hospitals or government insurers fought high prices and achieved reductions in medication costs. Dr. Whitman maintains that these successes show that there is room for pharmaceutical company profits even where lower prices prevail. Dr. Whitman writes that manufacturers should be required to conduct studies and release information about the comparative effectiveness of their medications and lower-cost alternatives, and that U.S. policymakers should demand this of pharmaceutical manufacturers.
Volume 6, Issue 43
If you collect Social Security benefits and your Medicare Part B premium is deducted from those benefits each month (this is the case for the majority of people with Medicare), you may be protected under the hold harmless provision. The hold harmless provision protects Social Security recipients from paying higher Part B premium costs so long as:
- You are entitled to Social Security benefits for November and December of the current year (2015);
- The Medicare Part B premium will be or was deducted from your Social Security benefits in November 2015 through January 2016;
- You don’t already pay higher Part B premiums because of Income-Related Monthly Adjustment Amount (IRMAA) eligibility; and
- You do not receive a Cost of Living Adjustment (COLA) large enough to cover the increased premium. COLA is additional income given to Social Security recipients to protect against inflation decreasing the benefit’s purchasing power. There is not a COLA every year, and it is not expected that there will be one in 2016.
The hold harmless provision does NOT protect you if:
- You are new to Medicare. Hold harmless does not apply to you because you have not been enrolled in Medicare Part B long enough to qualify.
- You are subject to IRMAA.
- You are enrolled in a Medicare Savings Program (MSP). However, the MSP should continue paying for your full Part B premium.
- You were enrolled in a Medicare Savings Program in 2015 but lost the program because your income increased or you failed to recertify.
Note: If you qualify for the hold harmless provision but pay a Part B late enrollment penalty, the penalty will not be waived, and may increase. This is because the penalty will be calculated based on the new, higher premium—even if you are not paying that higher amount. Thus while your base Part B premium will not change, you’ll likely face a higher total Part B premium bill due to the late enrollment penalty.
If you are a caregiver interested in connecting with State Health Insurance Assistance Program (SHIP) representatives and representatives from other national organizations who serve caregivers, attend the AARP Virtual Caregiver Fair on Thursday, November 19th. This live event offers you a convenient way to connect with important caregiving resources, services, tools, and to other family caregivers. Drop in anytime from 12:00 p.m. – 4:00 p.m. Eastern Time. Pre-registration is required.