Nearly a third of all Medicare beneficiaries face a steep increase in their premiums next year, the result of a policy that in certain circumstances requires some beneficiaries, including higher earners, to shoulder the burden of rising costs.
The government health-care plan’s trustees projected in a report Wednesday that premiums would rise by as much as 22% for wealthier beneficiaries of Medicare Part B, which covers doctor visits and other types of outpatient care.
The projected increase results from an intersection of the rules governing Medicare and Social Security, said Tricia Neuman, senior vice president and an expert on Medicare at the Kaiser Family Foundation.
Under the Social Security Act’s “hold harmless” provision, Medicare can’t pass along premium increases greater than what most participants would receive through Social Security’s annual cost-of-living adjustment. That adjustment is expected to be just 0.2% in 2017 thanks to low inflation. As a result, Medicare couldn’t pass along any premium increase greater than the dollar increase in Social Security payments to the estimated 70% of beneficiaries who will qualify for hold harmless treatment in 2017, Ms. Neuman said. Read more here.