Bloomberg

Oct 16, 2015 / by Nathaniel Weixel

OUTSIDE PRESSURE MOUNTING ON CONGRESS TO STOP MEDICARE PART B SPIKE

There will be no cost of living increase for people living off Social Security, but as a result, Medicare Part B premiums are expected to surge by a record amount. About 70 percent of beneficiaries will be protected from the estimated 52 percent spike by a “hold harmless” provision that links Part B to Social Security benefits. But the remaining 30 percent of the Medicare population (16.5 million Americans)—as well as the states they live in-- will be exposed to a pretty severe price shock. 

Medicare actuaries predicted in July that Part B premiums could increase from $104.90 per month to $159.30. That is of course, unless Congress steps in to do something about it. Advocacy groups and stakeholders (including Medicaid directors, insurance companies and the AARP) have been lobbying hard for lawmakers to take action. 

Part B costs are being driven by factors like an improving economy, rising drug prices and general health spending. And if the premiums are frozen for 70 percent of the population under the “hold harmless” provision, the costs will have to be spread over the rest of the population. In addition, all Medicare beneficiaries will see their Part B deductible increase 52 percent as well, from $147 to $223.

Medicaid directors say these increases are unfair to states, which are on the hook for paying the premiums of many Medicare beneficiaries, and groups like the AARP say the increases just aren’t fair to seniors. 

House Democrats held a rally earlier this month to call out what they said was Republican opposition to a Medicare deal, and haven’t let up the pressure. Rep. Sandy Levin (D-Mich.) issued a statement Oct. 15 calling on Republicans to join the Democratic legislative efforts. “Sixteen million Americans are relying on Congress to act now,” Levin said. 

Bills have been introduced in both the House and Senate to freeze 2016 Part B premiums at their current levels. The Senate bill (S. 2148) was introduced by Sen. Ron Wyden (D-Ore.), ranking member of the Senate Finance Committee. It has nine Democratic but no Republican co-sponsors. The House version of the bill (H.R. 3696) was introduced by Rep. Dina Titus (D-Nev.). That bill also has no Republican co-sponsors. 

Democrats have been pushing Republicans to sign on to the measures, but Republicans want the legislation to be offset. Freezing the premiums could cost well over $7 billion, according to a Congressional Budget Office estimate. Thus far, no pay-fors have been publicly discussed. It’s likely that any solution would have be included in an end-of-the year budget deal.