{ "id": "R44224", "type": "CRS Report", "typeId": "REPORTS", "number": "R44224", "active": false, "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source": "EveryCRSReport.com", "id": 447235, "date": "2015-11-16", "retrieved": "2016-04-06T22:43:24.830138", "title": "Potential Impact of No Social Security COLA on Medicare Part B Premiums in 2016", "summary": "Medicare Part B covers physician services, outpatient care, durable medical equipment, laboratory services, and some home health services. Most beneficiaries pay a monthly Part B premium that is set at a rate to cover about 25% of the costs of Part B. The General Fund of the U.S. Treasury covers most of the remaining costs.\nThese monthly Medicare Part B premiums are automatically deducted from the checks of Social Security beneficiaries. Current projections indicate that there will be no Social Security cost-of-living adjustment (COLA) in 2016, which means that monthly Social Security benefit amounts will not be increased. However, total Medicare Part B program costs are expected to grow. Because Part B premiums must cover 25% of projected Part B costs, premiums are also expected to increase. \nThe Social Security Act (SSA) includes a provision that holds most Social Security beneficiaries harmless from increases in the Medicare Part B premium that exceed the dollar amount of the increase in their Social Security checks. Affected beneficiaries\u2019 Part B premiums are reduced to ensure that their Social Security checks do not decline from one year to the next. In a typical year, the hold-harmless provision affects a small fraction of beneficiaries and has a limited impact on program finances. However, in a scenario where Medicare Part B premiums increase but Social Security benefits do not, such as in 2010 and 2011, the effects of the hold-harmless provision are larger and more complex.\nIf there were to be no Social Security COLA in 2016, Medicare Part B premiums would be affected in two ways. For about 70% of Part B participants, the hold-harmless provision would prevent their Part B premiums from increasing, so their Social Security checks would remain the same. For the other 30% of beneficiaries, the hold-harmless provision would not apply. These individuals would shoulder the entire beneficiary share of the increase in Part B costs. \nThe hold-harmless provision does not apply to four main groups of beneficiaries (there may be some overlap among groups):\nLow-income beneficiaries whose Part B premiums are paid by the Medicaid program (about 19% of beneficiaries);\nHigh-income beneficiaries who are subject to income-related Part B premiums (about 6% of beneficiaries); \nThose whose Medicare premiums are not deducted from Social Security benefits (about 3% of beneficiaries); and\nNew enrollees in 2016 (about 5% of beneficiaries).\nAdditionally, late-enrollment premium surcharges would be based on the premium amount of those not held harmless. Thus, those held harmless in 2016 who pay a late-enrollment penalty may still see reduced Social Security benefits as a result of the increased surcharges.\nThe substantial majority of those not held harmless are low-income beneficiaries whose Part B premiums are paid by the federal-state Medicaid program. As a result, most of the cost of the increase in Part B premiums in 2016 would be paid by Medicaid. \nThe statutory formula for determining the general revenue portion of Part B funding is based on aggregate beneficiary premiums. Therefore, unless Part B premiums are increased substantially on those who are not held harmless, the Supplementary Medical Insurance (SMI) Trust Fund, which finances Part B, would be at risk of exhaustion during the year.\nOn October 15, 2015, the Social Security Administration announced that there would be no Social Security COLA in 2016. Subsequent to that announcement, on November 2, 2015, the Bipartisan Budget Act of 2015 (BBA 2015; P.L. 114-74) was enacted. Section 601 of that act mitigates the expected sharp increases to Medicare Part B premiums for enrollees not held harmless and the deductibles for all enrollees in 2016. On November 10, 2015, the Centers for Medicare & Medicaid Services (CMS) issued the Part B premiums for 2016 using the determination methodology prescribed in the BBA 2015. As noted in this report, those enrollees held harmless will continue to pay the 2015 rate of $104.90 per month in 2016. Those not held harmless will pay monthly premiums of $121.80, and higher-income enrollees will pay $170.50, $243.60, $316.70, or $389.80, depending on their level of income.", "type": "CRS Report", "typeId": "REPORTS", "active": false, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R44224", "sha1": "ef6cde830cc117e33a0eb5411970424714ccfdf4", "filename": "files/20151116_R44224_ef6cde830cc117e33a0eb5411970424714ccfdf4.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R44224", "sha1": "d5b9f0a10dc711d8e26c7ae6ec3a73b32cceb1c8", "filename": "files/20151116_R44224_d5b9f0a10dc711d8e26c7ae6ec3a73b32cceb1c8.pdf", "images": null } ], "topics": [] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc795920/", "id": "R44224_2015Oct20", "date": "2015-10-20", "retrieved": "2016-01-13T14:26:20", "title": "Potential Impact of No Social Security COLA on Medicare Part B Premiums in 2016", "summary": "This report provides an overview of Medicare Part B premiums, the relationship between the Social Security cost-of-living increase (COLA) and Part B premiums, and the potential impact of a projected 0% Social Security COLA in 2016 on Medicare premiums, based on recent projections by the Medicare Trustees.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20151020_R44224_d9cbeff97bd483388415d29e066119037da3fae4.pdf" }, { "format": "HTML", "filename": "files/20151020_R44224_d9cbeff97bd483388415d29e066119037da3fae4.html" } ], "topics": [ { "source": "LIV", "id": "Medicare", "name": "Medicare" }, { "source": "LIV", "id": "Health policy", "name": "Health policy" }, { "source": "LIV", "id": "Cost of living adjustments", "name": "Cost of living adjustments" }, { "source": "LIV", "id": "Social security", "name": "Social security" } ] } ], "topics": [ "Health Policy" ] }