LETTER I RECIEVED
TODAY FROM SEN. DAN COATS ON MEDICARE PART B PREMIUM SPIKE
Posted on October 26, 2015 by kidneystories
LETTER I RECIEVED
TODAY ON MEDICARE PART B PREMIUM SPIKE FROM SEN. DAN COATS
Dear
James:
Thank
you for contacting me regarding premium increases in 2016 for Medicare Part B
and the Cost of Living Adjustment (COLA) for Social Security beneficiaries.
I appreciate the opportunity to respond.
Medicare
is the federal health insurance program for most individuals who are sixty-five
and older and for certain disabled persons. Medicare Part B provides coverage
for physicians’ services, outpatient services, durable medical equipment, and
other services. Part B is financed through a combination of beneficiary
premiums and federal revenue.
Many
Medicare Part B beneficiaries also receive Social Security benefits.
Contrary to popular belief, Congress does not determine annual Social
Security COLAs. Social Security COLAs are determined by an economic
formula that measures the increase or decrease in the price of goods in the
American economy. This formula, the Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI-W), is the sole determining factor of a COLA
for Social Security recipients. In 2015, Social Security beneficiaries
received a 1.7 percent COLA. However, in 2016 there will be no COLA
because the CPI-W decreased.
By
law, Medicare Part B premiums, which are deducted automatically from Social
Security checks for those who receive Social Security, must cover 25 percent of
the projected annual Part B costs. The Social Security Act (SSA) includes
a “hold harmless” provision that prevents premium increases should the amount
be higher than their Social Security monthly benefit. While this hold
harmless provision will prevent Part B increases for about 70 percent of beneficiaries,
30 percent of beneficiaries who are not covered by it must pay the portion that
otherwise would have been spread across all beneficiaries.
Each
year, the Centers for Medicare and Medicaid Services (CMS) determines the
Medicare Part B premiums for the following year. Reports that some
beneficiaries will face a steep 2016 premium increase are based on a July 2015
Medicare Trustees report. The Trustees documented an unexpected increase
in Part B spending that they estimate would cause premiums to rise. Since
there will be no Social Security COLA increase in 2016, the Trustees estimated
that the projected standard Medicare Part B premium is expected to increase
from $104.90 to $159.30 in 2016 for those not protected under the hold harmless
provision. Individuals not protected and thus subject to the increase
are: those covered under both Medicare and Medicaid (“dual eligibles”); high
income earners already subject to higher premiums; new beneficiaries; and those
not collecting Social Security benefits. The law does provide CMS with
some discretion in setting premiums, though CMS has not officially announced
the 2016 premium amount at this time.
I
understand that steep increases in Part B premiums will place a significant
burden on those Hoosiers who are not protected by the hold harmless provision.
As a member of the Senate Finance Committee, I am closely monitoring the
actions of CMS and I am actively engaged in examining responsible options to
fix this imminent problem and to address long-term solutions to preserve
benefits for current and future beneficiaries.
Thank
you again for contacting me, and please do not hesitate to keep in touch on
other matters of concern to you.
Sincerely,
Dan
Coats
United States Senator
United States Senator
To
learn more about the work I’m doing on behalf of Hoosiers, sign up for my
newsletter, visit my website, and follow me on Twitter and Facebook.
My reply:
Senator Coats:
Thank you for your reply of 10/26/2015. I appreciate your thoughtfulness. I am curious what your position is on co-sponsoring,
supporting and voting for the fix for this problem, S. 2148? Thank you again for such a prompt reply to my
initial inquiry. I hope to see you in
Washington, DC in March as part of the celebration for World Kidney Day.
Your friend and fellow Hoosier,
James W. Myers, III
Kidney Advocate
LINK TO PETITION TO FIX THIS PROBLEM
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