Nearly a third of Medicare beneficiaries may face a 52 percent increase in Part B premiums unless the Department of Health and Human Services (HHS) steps in.
The projected increase stems from Social Security and Medicare rules, reports the Wall Street Journal. Due to low inflation, Social Security isn't expected to pay a cost-of-living increase in 2016. So Medicare must evenly spread the projected premium increase across the 30 percent of individuals who don't qualify for the Social Security provision known as "hold harmless."
In response, HHS Secretary Sylvia Mathews Burwell says she plans to look for ways to reduce the projected premium rise, according to the article.
Theoretically, Burwell could lower the premiums "if she determines there are sufficient reserves," Tricia Neuman, director of the Kaiser Family Foundation's program on Medicare policy, tells the WSJ. "This is not a done deal."
But there may be a Social Security cost-of-living adjustment for 2016 should inflation pick up over the next few months. If this holds true, the hold harmless provision would impact a smaller portion of Medicare beneficiaries, meaning, the costs will be shared more equally. The projected base for Part B rates will reset for everyone at $120.70 a month in 2017, adds the WSJ.
Part B beneficiaries with incomes above $85,000 would have their 2016 monthly premiums rise from $146.90 a person this year to $223 next year. Yet those with higher incomes "have very little maneuverability," Neuman adds.
Elsewhere, while 2016 rates will likely increase substantially, industry experts believe "true" Affordable Care Act rates aren't expected until 2017. By then, insurer would have a few years of experience dealing with claims data, as well as the law's three Rs (risk corridors, reinsurance and risk adjustment), FierceHealthPayer previously reported.
- here's the WSJ article