HHS taps reserves to ease projected Part B premium rise

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One-third of Medicare beneficiaries will see a 10 percent Part B premium increase next year--less than originally projected because of intervention from federal health officials.

About 70 percent of Medicare beneficiaries are cushioned from Part B premium hikes by a provision known as "hold harmless” that takes effect when there is a low Social Security cost-of-living increase. For those individuals, the average Part B premium will increase from $104.90 in 2016 to $109 in 2017, according to the Centers for Medicare & Medicaid Services.

The remaining 30 percent of beneficiaries--including those who are directly billed for their Part B premium, those who are dually eligible for Medicaid and have their premium paid by state Medicaid agencies, and those who pay an income-related premium--will see Part B premiums rise from $121.80 to $134.

Department of Health and Human Services Secretary Sylvia Mathews Burwell “exercised her statutory authority” to mitigate even higher premium increases for those beneficiaries by tapping into Part B reserves, according to the announcement. HHS, it adds, “will work with Congress as it explores budget-neutral solutions to challenges created by the ‘hold harmless’ provision.”

Premiums for the third of beneficiaries not protected by hold harmless were expected to rise 52 percent in 2016, but a two-year budget agreement passed by the Senate last November spared them from the sharp rate increase. However, those seniors will see an additional increase in their monthly premiums to pay off a loan from the Treasury to the Supplementary Medical Insurance Trust Fund.

CMS also announced Thursday that the annual deductible for all Medicare Part B beneficiaries will be $183 in 2017, up from $166 in 2016. Additionally, the Medicare Part A inpatient hospital deductible that beneficiaries pay when admitted to the hospital will be $1,316 per benefit period in 2017, an increase of $28 from $1,288 in 2016.