Are Medicare Part B Premiums Going Up to $247 in 2014? This is the question I receive on a weekly basis from my clients. The question stems from an email that has been, and continue to, go around saying, basically that – that premiums are going up to $247 for Part B in 2014. The email has been going around in some form or fashion since 2009. Here’s the text of the email that I have seen (there may be other variations):
MEDICARE PREMIUM INCREASE
For those of you who are on Medicare, read the article below. It’s a
short but important article that you probably haven’t heard about in
the mainstream news:
$ 96.40, rising to:
$104.20 in 2012;
$120.20 in 2013; And
$247.00 in 2014.
These are provisions incorporated in the Obamacare legislation,
purposely delayed so as not to ‘confuse’ the 2012 re-election
Send this to all seniors that you know, so they will know who’s
throwing them under the bus.
So, is this true? Enough people believe it and are sending it around, so it must be true – right?
Not so fast! First of all, the 2011 and 2012 numbers are incorrect. The 2011 official Part B premium was $115.40, and the 2012 Part B premium is $99.90 (unless you fall into the high-income category or receive extra help paying your Part B premium).
Secondly, and most importantly, Obamacare or PPACA, as it is formally called, did not make any changes to the way that Medicare Part B premiums are figured. These processes for determining the Part B premiums are the same as they have been. One of the important components of these processes is the “hold harmless” provision – this says that Medicare premiums cannot go up for existing beneficiaries if Social Security payments do not go up. This “hold harmless” provision kept some beneficiaries, in 2011, paying the 2009 rates ($96.40) because there was no cost of living increase to Social Security in 2010 or 2011.
You should understand how Medicare premiums are calculated. Medicare beneficiaries are required to contribute to their Part B premiums. Right now, these contributions are required to be at 25% of total costs. So every year, Medicare figures out what the total costs will be and “backs into” that 25% figure that beneficiaries are responsible for.
For the Medicare Part B premium to go up that much, the cost of living increase in Social Security would have to be about 250%. Now, if that happens, there’s going to be a lot of happy Medicare beneficiaries! (That’s not going to happen!)
With all that understood, you can easily see that there is no way that this “scare tactic” email is correct. Sure, there are some things that insurance agents, insurance companies and consumers alike should be concerned with regarding the PPACA legislation, but this is simply not one of them. So if you receive this email, instead of “sending it on to all seniors you know”, why don’t you take a stand for truth and hit the delete button instead.
For more information like this, visit our Medigap website and blog on a regular basis. Or give us a call at 877.506.3378 with any specific questions regarding Medicare, Medicare Supplements or Part D.