Legislation Introduced to Avert Medicare Premium Spike

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.


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