If you like your Medicare premium not rising in 2016, wait until 2017

The basic Medicare Part B premium today is $104.90.  Under normal circumstances it would rise to $120.70 in 2016. I say normal circumstances, but since when is a 15% increase in Medicare premiums normal?

Either health care costs for Part B services have skyrocketed in the last year which is not consistent with the Obama administration’s narrative OR the previous year’s premiums were set too low to begin with. My guess is a combination of both.

20130518-085528.jpgBecause there is no Social Security COLA in 2016, under the hold harmless provision the Part B premium will not be raised at all for 70% of those on Medicare, but that doesn’t change the fact that to support the program the premium should be $120.70.

Now let’s assume a more modest growth in costs during 2016 of 6%. That means beginning in 2017 the premium needs to be $127.90 for everyone.

Given an average monthly benefit of about $1,300, any 2017 COLA would have to exceed 1.7% just to cover the premium increase from $104.90 to $127.90 in this example.

In other words, in 2017 it will be harder to see an actual net gain in the Social Security benefit for most people. My example uses only a 6% cost increase, imagine if it is 15% like 2016?

Well in that case, the new premium would be $138.80 which means in order to receive any net gain in the Social Security benefit the COLA would have to exceed 2.6% … good luck with that.

In other words, Medicare, just like any insurance company must eventually balance premiums with costs which if not done properly ultimately means a large premium increase … or they play games and find a way to shift more to taxpayers in general.

One comment

  1. Medicare is too high as co-pays for any Specialist in my plan is $35.00. As we get older, Specialists are the doctors most of us need to see, i.e Cardiologists, Eye doctors, and the list goes on. Of recent I had my annual wellness physical where the doctor ordered a renewed Tetanus shot and a shot for Shingles. The Plan has raised the Tier of the payment, so those shots for preventative are at a Tier 3. I appealed the level and was refused the lowering of the costs these shots. So,n seniors watch out when you garden that you don’t get cut by a rusty nail and if you had the chicken pox which most of us did since the shot wasn’t available, you will have to bear with the Shingles with costs too high for anyone to get the shot.With co-pays for Specialists up and and preventative shots at $40 each, anything extra in our low Social Security budgets have to go for co-pays . Then along with the costs of maintenance for our houses that we no longer can do, but require a Service repair person, I guess none of us are going on a vacation but stuck at home to pay our co-pays. The other question I have is when I get a statement from my Provider for Medicare, I notice full price is being charged for medications, rather than a lower payment that Pharmacies provide for co=pay of $4.00 RX’s, most of which are available to the general public, but the Plan charges Medicare full price. (i.e. the grocery store pharmacies, WalMart and many other offer $4.00 co-pay and our insurance companies are charging Medicare for the same RX over $200.) That is where the crack down needs to be addressed to save the costs for Medicare.Why can’t Medicare recipients who have a plan use that formula for RX instead of the high costs Medicare is being charged for the same RX anyone can get at these Pharmacies instead of the Plan charging full price? Someone needs to look into that as it would cut the costs of Medicare and perhaps our Medicare premiums could be reduced.Most companies offer a low-cost premium and we as Seniors have to pay a high cost and RX are being charged to Medicare at full price rather than making available the low cost meds on our plans. So, there is why Medicare has to increase costs – the HMO’s are charging them full price when it isn’t necessary. So, who would you contact for an audit??


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