Bill Halts Medicare Premium Increases

U.S. News & World Report

A bill passed by the house yesterday would prevent Medicare Part B medical insurance premiums from increasing next year. The legislation, which had 45 cosponsors, passed the house by a vote of 406 to 18.

About 75 percent of seniors are already protected from Medicare Part B premium increases because of a law that prohibits premium hikes from being greater than the annual boost in Social Security payments. Social Security payouts, which are tied to the Consumer Price Index, are not expected to increase in 2010. But, without congressional action, Part B premiums could increase for approximately a quarter of Medicare beneficiaries from $96.40 monthly this year to $104.20 in 2010 and $120.20 in 2011, according to the Medicare Trustees.

This increase in payments is steeper than usual because the costs are spread across a smaller share of beneficiaries. New Michigan Medicare enrollees and existing high income beneficiaries with a modified adjusted gross income above $85,000 ($170,000 for couples) are the individuals most likely to pay higher premiums next year if the bill does not become law. Medicaid, which is state and federally funded, would also have to absorb the larger Part B premiums for low-income seniors eligible for both government programs.