The government isn't going to kill your Grandma in the new health overhaul bill, but if she's rich, she better get ready to pay more for her Medicare.
Some Medicare beneficiaries may be on the hook higher premiums.
Some Medicare beneficiaries may be on the hook higher premiums. iStockphoto.com
That's the word that came out, very quietly, from officials at the Centers for Medicare and Medicaid on Friday. Buried in a Federal Register notice (and in a press release that somehow didn't get posted to the agency's website until this morning) is the official news that premiums for Medicare Part B (the coverage for outpatient and physician services) are rising to $110.50 per month next year, up from this year's $96.40.
Now the vast majority—73 percent—of Medicare beneficiaries won't face higher bills. That's because Social Security isn't granting a cost-of-living increase next year, for the first time in more than three decades. The two are connected because the vast majority of Medicare enrollees have their Medicare premiums deducted from their Social Security checks, and, by law, Medicare increases can't result in a net deduction in the amount of that check.
But that leaves a bunch of the remaining folks on the hook for a lot more. That's because another law requires that beneficiary premiums make up 25 percent of total Medicare Part B costs.
Among the 27 percent of beneficiaries not held harmless by the Social Security cap, there are low-income people whose premiums are paid by state Medicaid programs (17 percent); people who are new to the Medicare program (3 percent), and the aforementioned rich Grandmas wealthy enough to owe additional, "income-related" premiums (5 percent).
Last month, the House overwhelmingly passed legislation to block the increased premiums for that remaining 27 percent of Medicare beneficiaries. The vote was 406-18. But in the Senate, it's being held up by Sen. Tom Coburn, R-Okla. Coburn called it "unsustainable in the face of massive entitlement obligations and a raid on future benefits."
Meanwhile, the Senate this week is poking along on another Medicare bill — this one would cancel a scheduled 21 percent cut in pay for doctors starting in January. Cancellation of the cut is already assumed as part of next year's premium increase.