As Medicare approaches its 50th anniversary next week, the
federal program got some welcome financial news Wednesday: Its giant hospital
trust fund will be solvent until 2030, and its long-term outlook has improved,
according to a report from the program’s trustees.
But the report
warned that several million Medicare beneficiaries could see their Medicare
Part B monthly premiums skyrocket by 52 percent in January — from $104.90 to
$159.30. Medicare Part B, which is paid for by a combination of federal funds
and beneficiary premiums, generally covers physician and outpatient costs.
The huge rate hike
is predicted because of two factors: Medicare Part B costs increased more than
expected last year, and Social Security is not expected to have a cost of living
increase next year. By law, the cost of higher Medicare Part B premiums can’t
be passed on to most Medicare beneficiaries when they don’t get a Social
Security raise. As a result, the higher Medicare costs have to be covered by
just 30 percent of Medicare beneficiaries. This includes the 2.8 million
Medicare enrollees new to the program next year, 3.1 million Medicare
beneficiaries with incomes higher than $85,000 a year and 1.6 million Medicare
beneficiaries who pay their premium directly instead of having it deducted from
Social Security. An additional 9 million people affected by the higher rates
are so called “dual eligibles” — those on Medicare and Medicaid. States pay the
Medicare Part B premium for duals.
HHS Secretary Sylvia M. Burwell said she will
examine her options and make a final decision on rates in October. “Seventy
percent of enrollees in Part B will have no change in premiums,” she said at a
briefing with other program trustees.
(Kaiser Health News)
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