Medicare Premiums Set To Take One Of Biggest Jumps In Years According to New Analysis From The Senior Citizens League
WASHINGTON (PRWEB) December 17, 2019 -- Medicare Part B premiums are getting set to make one of the biggest jumps in 14 years, according to new analysis from The Senior Citizens League (TSCL). While the Social Security cost-of-living adjustment (COLA) will increase benefits by 1.6 percent in 2020, Medicare Part B premiums are climbing by 6.7 percent, “more than four times faster than the COLA,” says Medicare and Social Security policy analyst, Mary Johnson.
The standard monthly Medicare Part B premium, which covers doctors and outpatient services, will increase by $9.10 from $135.50 in 2019, to $144.60 in 2020. At the same time, the COLA will increase an average Social Security benefit of $1,460 by only $23.40. After deduction for the Part B premium, that would leave just $14.30 per month for someone with average benefits to cover all other rising costs, including other rising Medicare premiums for prescription drugs or supplemental coverage.
“The 6.7 percent increase in the Part B premium is the largest since 2006 for a year in which a COLA is payable,” Johnson says. There have been bigger jumps in Part B premiums as recently as 2016 and 2017, but those were two years in which there was no or almost no COLA paid. This situation can cause unusually high Part B premium spikes.
In 2016 the COLA was zero and Part B premiums rose by 16.1 percent. In 2017 the COLA was just 0.3 percentage point, and Part B premiums rose by 10 percent. “Those premium spikes were due in large part to the cost-shifting effect created when no COLA was payable,” Johnson notes.
When there is no or a very low COLA, a special provision of law known as “hold harmless” protects beneficiaries when the dollar amount of their COLA is lower than the dollar amount of their Part B increase. The Part B premium is adjusted to prevent a reduction in Social Security benefits from one year to the next. “But when this provision occurs on a program-wide basis — as it did in 2016 and 2017, the entire increase in Medicare Part B for the year is shifted to the people who are not protected by hold harmless, Johnson notes. Instead of the Part B increase being spread over all Medicare beneficiaries, the total cost increase is borne by only 30 percent of Medicare beneficiaries who are not protected by the hold harmless provisions. They include:
- people who are still working and pay Medicare Part B by check,
- low - income Medicare beneficiaries whose Part B is paid for by state Medicaid programs, and,
- beneficiaries with incomes in 2019 are $85,000 (single) $170,000 (couple) or more and who pay an income-related surcharge.
Because Medicare Part B premiums are automatically deducted from Social Security benefits, retirees find it difficult to fully anticipate the squeeze that rising Medicare Part B (and other Medicare premiums) can put on benefits and their budgets. In the past 15 years the percentage of the Social Security COLA increase has been lower than Medicare Part B premium increase 9 times.
All beneficiaries get a notification letter from the Social Security Administration explaining the amount of their benefits and the amount that will be deducted for Part B and any other deductions. “Those with the lowest benefits – less than $570 per month in 2020 — are at risk of seeing their Medicare Part B premium consume their entire COLA,” Johnson notes.
Medicare costs take a significant portion of retirees’ Social Security benefits. A survey conducted by The Senior Citizens League found that more than 51 percent of survey participants report spending at least $376 per month on total healthcare costs (including premiums and out-of-pocket costs) and more than one – in- five spend $1,000 or more per month.
To learn more, visit http://www.SeniorsLeague.org.
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With 1.2 million supporters, The Senior Citizens League is one of the nation’s largest nonpartisan seniors’ groups. Its mission is to promote and assist members and supporters, to educate and alert senior citizens about their rights and freedoms as U.S. Citizens, and to protect and defend the benefits senior citizens have earned and paid for. The Senior Citizens League is a proud affiliate of The Retired Enlisted Association. Visit http://www.SeniorsLeague.org for more information.
Shannon Benton, The Senior Citizens League, http://www.SeniorsLeague.org, 800-333-8725, [email protected]
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