This week, leadership in both the House and Senate sounded alarms about the potential spike for Medicare premiums next year. On Wednesday, Senate Finance Committee Ranking Member Ron Wyden (D-OR) introduced S. 2148 and in the House Representative Dina Titus (D-NV-1) introduced H.R. 3696, legislation to avoid the projected 52% increase in Medicare Part B premiums that would impact 15 million beneficiaries (roughly 30% of Medicare beneficiaries) in 2016. Premiums and deductibles are expected to spike due to a projected 0% cost of living adjustment (COLA) and the affected beneficiaries will face increased costs from being excluded from a rarely-used “hold-harmless” policy. The legislation would hold 2016 premiums constant for the excluded group at the 2015 level of $104.90 (instead of an increase to $159.30) and maintain the deductible for all beneficiaries at the 2015 threshold of $147 (instead of the increase to $223).
Medicare’s “hold-harmless” provision is designed to ensure that beneficiaries will not have a reduction in their monthly Social Security benefit, by ensuring that the dollar increase in the Part B Medicare premium cannot be more than the dollar increase of a beneficiary’s monthly Social Security benefit. Certain beneficiaries are statutorily excluded from the “hold-harmless” provision, particularly those eligible for both Medicare and Medicaid (“dual-eligibles”) who make up two-thirds of the excluded group, as well as new beneficiaries, high-income beneficiaries, and Medicare beneficiaries who do not receive Social Security. This could be especially harmful for Medicare-eligible individuals who delay Social Security until a later age and could be hit with this increase.
This issue also came up in 2010 with a smaller projected increase for those excluded from the hold-harmless group. Similarly, legislation was introduced in both chambers, and while the House overwhelmingly passed their bill by a vote of 406 to 18, the Senate never took up the legislation and the premium and deductible increases went into effect in 2011.
