October 14 2015 National Coalition on Health Care Tricia Neuman Sc D Director Program on Medicare Policy Kaiser Family Foundation Actual and Projected Medicare Part B Premium and Deductible 20152017 ID: 482238
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Medicare Part B Premium and Deductible: What’s in Store for 2016?
October 14
, 2015
National Coalition on Health Care
Tricia Neuman, Sc. D.
Director,
Program on Medicare
Policy
Kaiser Family FoundationSlide2
Actual and Projected Medicare Part B
Premium and Deductible, 2015-2017
Exhibit 1
Part B Standard Monthly Premium
Part B Annual Deductibl
e
Actual
Projected
Actual
Projected
SOURCE: Kaiser Family Foundation; data from CMS Office of the Actuary and 2015 Medicare Trustees report.
$159.30Slide3
In 2016, Part B premiums are expected to rise, as they often do, to meet requirements under law for total premium revenue to cover 25% of program costs and
provide for
adequate “reserves” in the Part B Trust FundSocial Security recipients are expected to get no cost-of-living adjustment (COLA) in 2016 – not unprecedented, but not typical eitherThe typical Medicare beneficiary relies on Social Security for the bulk of their incomeThe “hold harmless” protects Social Security recipients from seeing their Social Security benefit payments decrease as a result of an increase in the Medicare Part B premium Most Part B enrollees have their Part B premium deducted from their Social Security payment
What explains this
highly unusual projected
spike in the Medicare Part B premium and deductible?
Exhibit 2Slide4
Year 1
Year 2
$1,500
$1,545– $100– $105
$1,400
$1,440
Year 1
Year 2
$1,500
$1,500
– $100
–
$105
$1,400
$1,395
Example
1: A Typical Year
Social Security:
3% COLA
Part B premium:
5% increase
Example 2: No COLA
Social Security:
0% increase
Part B premium:
5% increase
Monthly Social Security benefit
Monthly Part B premium
Net Social Security benefit
The “hold harmless” provision prevents the increase in Part B premium and a reduction in the Social Security benefit
How does the hold-harmless provision work?
Exhibit 3Slide5
Most (70%) Part B enrollees will pay the same Medicare Part B premium in 2016 as they paid in 2015 – due to the “hold harmless” The
remaining 30% of Part B enrollees (or Medicaid, on behalf of dual
eligibles) will pay even higher premiums to generate sufficient premium revenue to cover 25% of Part B costs, with adequate “reserves” This could result in a projected 52% increase in the standard Part B premium and Part B deductibleThe Part B deductible is NOT protected by the hold harmless
The Bottom Line for 2016
Exhibit 4Slide6
70% of Part B enrollees held harmless from 2016 Part B premium increase
30% of Part B enrollees not protected by the hold-harmless provision
Medicare beneficiaries with Medicaid (dual
eligibles)New enrolleesBeneficiaries who are not receiving Social SecurityHigher-income beneficiaries SOURCE: Kaiser Family Foundation; data from CMS Office of the Actuary and 2015 Medicare Trustees report.
Most Part B enrollees (70%) are protected by the hold harmless provision, but 30% are not
Exhibit 5
2016 Medicare Part B Enrollment = 52 millionSlide7
SOURCE: Kaiser Family Foundation; data from CMS Office of the Actuary and 2015 Medicare Trustees report.
Monthly standard and income-related Medicare Part B premium amounts are expected to rise 52% between 2015-2016
Exhibit 6
Standard premium
Income-related premiums
Up to
$85,000
$85,001-
107,000
$107,000-160,000
$160,001-$214,000
More than $214,000
Income for single people
For enrollees who are held harmless, 2016 premium will be
$104.90Slide8
What’s Next?
Exhibit 7
Social Security Administration will make an announcement about the COLA (October 15
th
)
The Secretary
will
make a determination and announce 2016 Medicare premiums and deductibles – which may or may not be identical to those included in the Medicare Trustees’
reportThe new Medicare premiums
and deductibles will take effect for 2016, unless the law is changed Slide9
Medicare’s Income-Related Premiums:
A Data Note
The Ups and Downs of Medicare Part B Premiums: Frequently Asked QuestionsRaising Medicare Premiums for Higher-Income Beneficiaries: Assessing the ImplicationsThe Facts on Medicare Spending and FinancingIncome and Assets of Medicare Beneficiaries, 2014 – 2030
Additional Resources on kff.orgFor more information, visit kff.org/medicareExhibit 13