Real impact on Medicare Parts B and D premiums of no Social Security COLA in 2016

Medicare beneficiaries are required to pay 25% of the cost of Part B and D of Medicare. 

However, for the great majority of beneficiaries these premiums cannot be raised to the extent it causes a decrease in the Social Security net payment each month. But this does not change the requirement that in total beneficiaries must pay 25% of costs. So, where does the money to accomplish this come from? 

The amount needed to reach the 25% contribution is taken from those beneficiaries who have an income higher than $85,000 a year- billionaires as Old Bernie Sanders might call them. In other, words premiums for these “wealthy” people increase by the actual required amount plus enough to cover the increase not being paid by the majority of beneficiaries. 

In 2016 some beneficiaries will face a 50% increase in premiums.

Source: Kaiser Family Foundation


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