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2016 Medicare: Update About Medicare Premium Increase

2016 Medicare news update

As we shared in our recent post, some Medicare beneficiaries could be facing a steep hike in their 2016 Medicare premiums. Part B premium increases are tied to Social Security COLA (Cost of Living Adjustment), and since there will be no COLA in 2016 (announced October 15th) most (about 70%) of Medicare recipients fall under the “hold harmless” protection and will not pay more. However, the remaining 30% (those not receiving Social Security, new Medicare enrollees, and high income individuals) could be facing a base rate increase of 52% (from $104.90 to $159.30) on their 2016 Medicare B premium. The premium scales higher based on 2014 income (up to $509.80).

The potentially good news is that a bipartisan budget proposal which recently passed in the House of Representatives would offer relief for these 30% of Medicare recipients*. Under this budget, the 2016 Medicare premium increase would be reduced to about a 14% increase. In this proposal, the costs for Part B would be covered by a treasury loan, gradually paid back by incremental Medicare premium increases.

There are some other provisions in this budget that might affect you or your loved ones. First, on a positive note, it addresses potential cuts to Social Security disability payments, by reallocating some of the payroll taxes to this program. On a less positive note, some households may be losing Social Security benefits (those receiving benefits under a spouse, ex-spouse or parent’s work record…if that person has suspended his/her benefits).

Get all your 2016 Medicare News!

We will keep you updated on the progress of this bill and other 2016 Medicare news. We invite you to sign up to be one of the first to receive our 2016 Medicare fact sheet, as well as our monthly insider tips.

You may want to read our article about Medicare 2016 open enrollment as well.

*Update: The bill was passed in the Senate.

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