The recently passed “Bipartisan Budget Act of 2015” raises the debt ceiling and avoids a costly government default until 2017. In addition to some changes in the rules regarding the availability of Social Security claiming strategies, it also includes some provisions impacting recipients of Medicare benefits. This article addresses those impacts.
Medicare Part B Premiums and Deductibles Adjusted
The Budget Act reduces a huge increase in Medicare Part B premiums and deductibles that would have hit 30% of Medicare beneficiaries on January 1. This diverse group includes people who do not collect Social Security, or who will be enrolling in Medicare’s Part B for the first time in 2016, or have higher incomes, or are poor enough that they also qualify for Medicaid.
Under existing law the remaining 70% of beneficiaries are “held harmless” from a premium increase. Under the old laws, Medicare premiums were scheduled to jump by 52% for millions of seniors.
The unlucky 30% were facing an increase of more than 50 percent in their standard monthly Part B premiums. And all Medicare beneficiaries were going to see their annual Part B deductible go from $147 to $223.
Instead, the Budget Act will raise premiums about 15% for the unlucky 30% who are not held harmless. This puts their base premium at $120 a month, although higher income individuals will pay much more. The other 70% of Medicare recipients will see no premium increase.
The annual Part B deductible will increase to about $167 for all Medicare beneficiaries (rather than $223).
So there will still be cost increases for Medicare beneficiaries in 2016, but they will be much smaller than would have occurred without the new Budget law.