The January 8, 2010, issue of the Oast & Hook News discussed
Medicare premiums for 2010, and stated that some beneficiaries would pay higher
part B premiums in 2010. Most beneficiaries will not see an increase in
2010 because of the Social Security Act's "hold harmless"
provision. This provision means that Medicare cannot pass along a premium
increase to Social Security recipients that is higher than the Social Security
annual cost-of-living adjustment. There is no Social Security increase
expected for 2010, so Medicare cannot charge beneficiaries receiving Social
Security any extra premiums.
Medicare Part B premium revenues are intended to cover approximately 25% of
the average cost of Medicare Part B services received by enrollees age 65 years
and older. The premiums are set by the Department of Health and Human
Services. Because 73% of Medicare Part B beneficiaries also receive
Social Security and therefore have no premium increase, the remaining 27% of
Medicare recipients must make up the difference with higher premiums in order
to cover increased costs of Part B services. According to a Kaiser Family
Foundation report, "The Part B premium increase is higher than it would
otherwise be because the costs are spread over a smaller share of beneficiaries."
A recent Wall Street Journal article stated that the beneficiaries
affected by the premium increases include the 3% of the Medicare Part B
recipients who will turn age 65 years this year, as well as the 2% of Part B
recipients who are not yet receiving Social Security because they are waiting
to reach their full retirement age to begin receiving Social Security.
Those individuals will pay a minimum of $110.50 per month in premiums, up from
$96.40 per month. This inequity is expected to extend into 2011, if there
is no Social Security cost-of-living adjustment next year. Higher income
individuals who are subject to larger monthly Part B premiums and lower-income
enrollees whose premiums are paid by Medicaid are also no covered under the
hold harmless provision. Some individuals who are subject to the higher
premiums have expressed unhappiness with the result. Richard Braden, age
66 years, was laid off in 2008, but delayed signing up for Social Security
until he reached his full retirement age in December 2009. Because he was
not receiving Social Security in November 2009 (as required to be covered by
the hold harmless provision), he must pay the higher Part B premium this
year. "It really bothers me that I'm being penalized for waiting [to
receive Social Security]." His family lives on their savings and his
wife's salary. Oast & Hook will keep readers of the Oast &
Hook News informed about further developments with this issue.
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