Medicare

Medicare premium increases, Part B premiums in 2014

Estimated Funding Gaps in Medicare and Social ...

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There is information floating around the Internet saying that by 2014 the Medicare Part B premium will be around $247 per month and at the same time blaming this on the Patient Protection Affordable Care Act (PPACA).

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First, there is nothing in the annual Medicare Trustees report to support this. Take a look for yourself on page 234 of the report where you will find a table projecting premiums and deductibles to 2019.

Keep in mind one thing. These projections include an assumption that the reduction in physician payments will go into effect. They won’t go into effect, but even without those reductions projections do not reach $247 per month.

Also, there are several different premiums for the same Part B coverage.

Current beneficiaries are protected by a hold harmless provision so if there is no Social Security cost of living adjustment there is no increase in Part B premiums.

Then there is the premium applicable to new beneficiaries. That premium is higher than current beneficiaries because it is raised each year regardless of a Social Security COLA.

Finally there are the premiums for higher income beneficiaries who pay as much as 80% of the cost of Part B whereas the standard is 25% and who are also not protected by the hold harmless provision.

There is no question Medicare premiums are going up and up as are Medicare taxes. But to blame that on Obamacare is misdirected. Premiums are going up primarily because of the underlying use of health care services by a growing Medicare population and by the cost of each of those services.

If you are not yet near Medicare age, keep this in mind. In today’s dollars you and a spouse combined will spend between $700 and $900 per month for Medicare Part B and D premiums and for a Medigap policy. You can escalate those costs by 6 to 8 percent a year.

See an updated article on this topic here

 

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Categories: Medicare

66 replies »

  1. It’s a matter of doing the math! If people are not working and paying into programs, where will the money come from. I will never receive 10% of the money I paid into social security . At 7.000 a year, I will have to live to be 100 years of age. AND. I didn’t ask for medicare and I only contributed to it the last 12 years I was employed. My insurance costs me more now with less benefits than I had before retiring. “Actually. I won’t live to be 100. Should my cancer reoccur after I turn75, the death panels will refuse to treat me.

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  2. Medicare regardless of what the Part B Premium will be for 2014 is basically bankrupt. Congress borrowed from it and so did Obama for his Obama Care (Affordable Care Act). And we are going to trust the Government (IRS) to run this program efficiently?? Now just to be fair (as Obama loves to say) I didn’t do research on this, so set me straight. I’m sure you will.

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    • Congress didn’t borrow from it. The Affordable Care Act attempts lower Medicare costs by lowering payment to providers over ten years in a variety of ways. Whether that all works is questionable. Medicare is going broke simply because it is spending more than it is raising in revenue through taxes and premiums.

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      • Government has been using the Medicare fat account for decades any way it wants to. If left alone, there would be no problem now.

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      • In 1983 the contributions to social security and medicare went up. This was to insure coverage for the ‘baby boomers”. Congress stole the money and left useless IOUs. Now they say not enough revenue to cover costs and the people are dumb enough to believe this.

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      • Oh my, I hope you really don’t believe that. The trust fund bought special bonds from the Treasury. The interest on those bonds plus incoming taxes are what is now paying Social Security benefits. At some point that will not be enough to pay benefits and bonds will have to be redeemed and when that’s done incoming taxes will only pay a portion of promised benefits.

        When taxes exceeded what was needed to pay benefits where would you have put the excess to earn interest ?

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    • It is to bad you aren’t telling the truth in this. Obamacare did not change how Medicare does the formula to determine the medicare deductible. The 2014 deductible will not be determined till October 14, 2013 or after. Another scare tactic plow!

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      • Exactly what are you talking about? Where do get the idea I ever said the Medicare premium had anything to do with the Affordable Care Act. I have been trying to kill that rumor for the last three years.

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  3. I have friends that are complaining about being forced to buy insurance under Obama care. These are the same people that go to the ER for a bad cold and the tax payer (ME) picks up the bill – unbelievable
    Charlene

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    • Even if there were no Obamacare people like that are just irresponsible. Nobody wants to pay for health care or health insurance if they don’t have to, but simply passing costs to others is reprehensible in my opinion.

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  4. I’ve been living outside the US for over 20 years and for the past 16 paying for but not getting Medicare. Is there any way to break this indentured servant relationship with the government?

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    • You do not need to pay for Medicare part A and if you have a private insurance of your own or threw your employer than you do not need to pay for Medicare part B. Just call your local Social Security office and tell them you have insurance and you do not need the Part B, they will send you a paper to fill out and sign and you will be exempted to pay the part B. hope this helped. Just cancel your Medicare with the SSI office.

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      • That’s wrong. If you quit Medicare Part A you lose all Social Security benefits and you won’t find any insurer issuing a policy for Medicare eligible charges. You can of course pay out of pocket. For Part B as long as you are working and have health insurance, you must take employer coverage as primary so there is no reason to carry Part B until you retire. Part B is not automatic you must enroll or waive coverage. People permanently living outside US probably don’t want to pay Part B and nobody pays for Part A except through payroll taxes.

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  5. I’m still working at the age of 68 and expect to continue for several years. Is there any medicare premium penalty for delaying enrollment to a later age while still covered by a group policy?

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    • If you are still working and have employer coverage, you are not allowed to enroll in Part B Medicare, but must keep your employer coverage as your primary coverage. When you finally stop working you then enroll in Medicare and there is no penalty and no additional premium. But you must enroll within a few months of stopping work. Check with Medicare for the exact period you have to enroll before you do incur a penalty.

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    • Yes, you will be penalized 10% for each year you delay enrolling in Medicare Part B. I waited till age 70 and pay 150% of the premium – and that doesn’t change over time.

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      • Not correct. You are not penalized IF you are working and covered by an employer group plan. Once that coverage stops you must enroll in Medicare.

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  6. Thank you Mr. Quinn. Since I am retired and know how Medicare Part B works, I thought the rumor was right-wing propaganda, anti-Obama bunk. Thanks for reading the law and confirming my judgement.

    It is interesting to see how your response to a specific question resulted in posts that were completely off the subject, addressed other issues or were outright distortions of the truth (i.e., reference to Snopes).

    Keep up the good work Mr. Quinn. Intelligent people are always interested in the facts.

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    • Thank you for your note. It’s nice to hear from people who both understand the issue and appreciate the information I try to provide.

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  7. I own a brokerage agency and sell Medi-gap polices in North Eastern PA. I appreciate this article clearing the myth but just to provide a bit more accuracy. The average cost for a couple purchasing Medicare B, Part D plus Medi-gap is between $500-$700, not $700-$900/month. I will agree with the inflationary average, although this year it was more like 9-15% in PA.

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  8. Shocking discovery! Federal taxes are paid based on adjusted gross income, less deductions. Medicare part B premiums are based on modified gross income without deductions. I’m retired, and decided to move investments from stocks to bonds. When I sold stock, the gross amount goes into MAGI. So I got a huge increase in Medicare premiums!!! Like double the normal amount. What a rip off!

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      • According to the Social Security website there isn’t a “Life Changing Event” that accompanies my MAGI went down because I am not selling any more stock. According to my interpretation of the rules and the form 0960-0784 his Medicare premiums will not go down. The same goes for selling your home.

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  9. Get the facts. Write your US Rep. and ask him / her to tell you what Obama Care will do in 2014 on the Medicare premiums. Then get it in writting from them.
    Obama Care has very little to do with insurance and is all about Gov. Controll on every facet of our lives. The Gov. has never done anything that turns out good for the people at a fair rate. The current Adm. in Washington DC believes that we (the people) are dumb and do not know what is best for us.and only they do. Well The Russian people believed that at one time so they let that happen.. Gov. Control. They lost their freedom. With Obama Care we are taking a major step in that same direction. Remember once we lose our Freedom we and our children will NEVER get it back.
    I could talk aboutthis for hours. Hope this gets you started in the right or correct direction. Thank You / JC

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    • There is nothing in Obamacare that increases the Medicare premium in 2014 or any time. The premium is set by the actuary and by the Medicare law as are the deductibles within Medicare. The story about the 2014 Medicare premium is false as are many other phoney e-mails routed around by uninformed people.

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      • This is unbelievable. Snopes says no such thing. Have you actually read Snopes on this topic. Here is what it in fact says:

        As for future Medicare Part B premium rates, the information cited above is wrong on two counts: No provision of the health care legislation passed during the Obama administration sets Medicare premium rates, nor is a whopping jump of over 100% to a $247.00 monthly premium in 2014 a realistic figure.

        Dick

        Richard D Quinn Editor Quinnscommentary.com

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      • Snopes is run by a liberal group…..not totally trustworthy just like our mainstream media and this site. They will tell us anything to get their messiah re-elected. They are saying, sure the Medicare premiums are going up, but not because of Obamacare. Truth is Obamacare will significantly increase medical costs which naturally will increase premiums. Same thing as saying Obamacare will increase Medicare premiums.

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    • u r right Jerry –wish more people knew what is going on in this country.
      I don’t understand why people are so uninformed but a lot of it has to do with the lack of information from the mainstrem media.

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      • Talk about facts. Here is an idea, read the law as I have and read the Medicare trustees report as I have and then show me anything anywhere that in any remote way talks about the Medicare premium in the Law or anything like $247 in the Trustee report. Then look at where the premium is today, the historical inflation increase, do the math in the worst case scenario and see if you can get anywhere near $247 in 18 months from now. All premiums, including Medicare will go up and up Obamacare or not, but they aren’t going to more than double in the next 18 months. Everyone is entitled to their opinion, but basing it on some semblence of hard facts would be nice. The Medicare rumor is as silly as the 3.8% sales tax on selling a home or the one that says members of Congress get their full pay for life.

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    • I also thinik that the replys for Obama care and justifiying the increases are posted by the Obama people to make us believe the untruths.

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      • Given that the Medicare premium can’t rise under the law faster than the cost of living adjustment for Social Security, do you also think your Social Security benefit will increase by over 100% by 2013? That’s the only way 95% of those on SS could pay a $247 Medicare premium.

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  10. My husband and I already pay over $500 a month for Medicare and our gap insurance, and we did not even sign up for the prescription drug plan. We pay for our own prescription drugs.

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    • You might want to check out the penalty for delaying your enrollment into part D in case there is any chance you may need/want it in the future.

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    • Get rid of your gap insurance and check out Humana or other Medicare
      org’s and the premium difference will put several thousands of dollars over a 5 year period.

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    • You can link to the Trustees report which you can find in these articles. You can also find the history on the Medicare.gov website.

      Dick

      Richard D Quinn Editor Quinnscommentary.com

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  11. For starters the price we pay for drugs is excessive. If we compare the price we pay to what Canadians pay for the same prescription with the same strength and from the same pharmaceutical company we are paying 8 times more.
    Cut the price of drugs and reduce the useless superfelous tests and premiums do not have to escalate.,

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    • Drug prices in the US may be excessive, but in large part that is becasue we subsidize the rest of the world where they cap the price of drugs. If we did that as well, the money to research new drugs would decline.

      In addition, drugs expenses are not part of Medicare Part B and thus do not affect that premium.

      Reduce superfellus test, yes indeed.

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  12. You are partially right and partially wrong. The PPACA does not necessarily increase the cost of Medicare B. Congress did not have to address that issue. Medicare is already managed by HHS. Medicare law already allows them to adjust premiums for Medicare B as they see fit. According to page 131 of the CMS Publication, “Medicare and You,” the premium for Medicare B will be determined by a person’s taxable income from 2 years before. While most people will only pay $ 115.40 each month for Medicare B, the premium can be as high as $ 369.10 per person per month. For a couple, that is already over the $ 700 per month that you alluded to.

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    • Not sure I understand your comment as I did not say PPACA addressed Medicare premiums I referred to a erroneous e-mail. Most people never reach the top two tiers of the income based premium, even without that the Medicare premiums plus Medigap premiums get many people in the $700 range.

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  13. My opinion is that costs will go up not down as a result mainly because Congress will eventually kill all the cost cutting measures.

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  14. agreed, people tend to read a number in an email and run with it… don’t you think that the PPACA will escalate costs though with medicare being cut by $500 million? They’ll have to do something to offset that, although I think reimbursements to Medicare Advantage plan sponsors will take a good bit of the cuts

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    • Healthcare costs have nothing to do with insurance. High costs are generated at the source, the doctors and hospital systems , further increasing prices is the cost of liabilty for the hospitals. etc…
      Tort reform will help control prices…can you imagine what costs would be if there was no insurance/3rd party payer?

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      • Obama said you could keep you insurance if you wanted to. Now people are receiving letters that they have to obtain new insurance plus the increased cost.

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    • I just got my 2013 Renewal info from Humana, No HMO Gold Plus/PPO Just HMO. Just going through the book and have calculated between 10 to 50% increase and no Out of Network covered only In Network. They fooled us into this program last year which we liked, but we are doomed this year for sure. Checked other programs, they are about the same. So you don’t think Medicare has increased, Right????? Someone had to o.k. the changes for the Insurance Companies??? I’m trying to find the cost for regular Medicare Program now to see is they changed the prices too for Services. Has anyone checked this out? I’m really upset right now and it doesn’t matter which Politician is talking, they just lie to cover their actions.

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      • The basic Medicare Part B premium will not be known until about October 15th or so. However, early projections indicate an increase to about $110 give or take a few dollars.

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