Groups Urge Lawmakers to Combat Rising Medicare Part B Premiums

By on October 3, 2016 in Retirement with 0 Comments

Image of hand holding Medicare card

A total of 75 organizations sent a letter to lawmakers last week asking them to find a solution to the sharp expected increase in Medicare Part B premiums that was forecast in the 2016 Medicare Trustees report.

The letter cited a figure from the report suggesting that premiums could rise by as much as 23% for nearly 30% of beneficiaries. This, coupled with the likelihood of little to no COLA next year, means that retirees could be facing a difficult situation.

In the letter, the organizations state that “According to the 2016 Medicare Trustees Report, Part B premiums will increase significantly for nearly 30 percent of beneficiaries. It is estimated that 2017 Part B premiums could increase to an estimated $149 per month, which is a significant increase over the standard 2016 Part B premium of $121 per month. The trustees also predict that this increase will be accompanied by a hike in the Part B deductible—up to $204 from $166.”

The letter asks that Congress support an extension of the solutions included in the Bipartisan Budget Act of 2015 and extend the protections of the hold harmless provision to all beneficiaries.

While most CSRS retirees are affected, other groups feeling the impact include individuals turning 65 this year, state and local government retirees not covered by Social Security, and state Medicaid programs.

Last year’s Bipartisan Budget Act of 2015 allowed the Part B monthly standard premium to increase by 16 percent to $121.80 for those Part B enrollees whose premiums were not deducted from their Social Security benefits, but that increase was far less than the $159.30 amount initially projected by Medicare actuaries.

The legislation also said that there would be no increase in premiums in 2017 provided that there was no COLA, but a small COLA, which could be as little of 0.2 percent, would allow Medicare trustees to impose at least a 22 percent increase in the standard premium for those not protected by the hold harmless clause.

The actual amount of the COLA and Part B premium increase will not be determined until the September CPI-W is published on October 18. Medicare trustees are required by law to set premiums so that premium income and general revenue income for Parts B and D cover expected costs and ensure a reserve for Part B contingencies.

When the trustees are restricted from raising premiums on the 70 percent of enrollees covered by the hold harmless clause, premiums for the remaining 30 percent of enrollees must rise more to offset expected costs unless Congress passes alternative legislation.

The organizations write:

No beneficiary should be forced to pay more than they otherwise would simply because some beneficiaries are afforded critical protections against reductions in their Social Security checks. We urge Congress to act accordingly and swiftly following the announcement of the 2017 COLA. The longer Congress delays, the more uncertainty for our nation’s retirees, people with disabilities, and their families who are counting on you.

Groups signing the letter include AARP, AFL-CIO, America’s Health Insurance Plans, the National Active and Retired Federal Employees Association, and many public sector unions.

A copy of the letter is included below.

2017-09-27 Letter Re: 2017 Medicare Part B Premium Increases

© 2016 Michael Wald. All rights reserved. This article may not be reproduced without express written consent from Michael Wald.


About the Author

Michael Wald is an independent economics analyst and writer based in the Atlanta area. He specializes in topics related to business, labor, and human resources. Prior to his retirement from the U.S. Department of Labor, he served as the agency’s Southeast Regional Director of Public Affairs and Southeast Regional Economist.