This week, the President signed into law a two-year budget agreement that prevents the projected significant increase in the Medicare Part B premium and deductible for 2016.
Premiums for 30 percent of beneficiaries were projected to increase from $104.90 to over $150 because of several factors, including higher than projected Medicare outpatient costs in 2015 and the lack of a cost-of-living increase for Social Security recipients. Other beneficiaries who have their Part B premium deducted from their Social Security check were already “held harmless” and protected from increased Part B premiums where there is no increase in their check. This meant that the increase fell on a smaller group, and was therefore larger for each affected person.
The fix passed in the budget will make the premium for next year about $120 instead of $150 or more. Additionally, the Part B deductible, or amount people have to pay out of pocket before their coverage begins, was also set to increase to about $223. The deal reduces the projected deductible to $167.
To limit the magnitude of the premium increase, the fix looks to what the premium would have been had the increase been spread across all enrollees, and it “loans” the difference from the Medicare trust fund to the 30 percent of beneficiaries affected by the increase. These beneficiaries as a group will have to repay that loan by paying a $3 per month surcharge.
Final amounts for the Part B premium and deductible should be released soon.