Push is on to protect Medicare enrollees from huge 2016 premium increase

Should 30 percent of Medicare beneficiaries shoulder a 52 percent premium hike next year while the other 70 percent pay no more at all? Advocates for seniors don’t think so, and they’re making a push to convince Congress to stop it from happening.

The Medicare population vulnerable to shouldering the larger premium includes some federal and state government employees, people who sign up for Medicare for the first time next year, low-income seniors whose premiums are paid by state Medicaid plans and high-income seniors who already pay premium surcharges.

For these 16.5 million enrollees facing the stiff increase, monthly premiums would rise to $159.30 from $104.90, according to the recent annual report of the Medicare trustees.

Meanwhile, 36 million Medicare Part B enrollees would have their premiums hold steady at $104.90 because increases are tied to Social Security cost-of-living adjustments as part of a “hold harmless provision” in the Social Security Act. Because no COLA is expected next year due to extraordinarily low inflation this year, the Part B premium will stay flat.

Advocates for the 30 percent are swinging into action, trying to convince Congress to pass a one-time fix that would hold off on cost of living increases for everyone. Legislation that extended the hold harmless provision to those not covered by it passed the House of Representatives when a similar situation occurred in 2009, but never received a vote in the Senate.

This time, the fix is being pushed by a broad coalition of advocates and organizations representing federal and state government workers. No official figures are available, but a back-of-the-envelope calculation suggests a fix would cost the federal government $10 billion.

Learn more in my Reuters Money column this week.

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