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From Health Law Daily, November 12, 2015

Medicare premiums, cost sharing to rise 1 percent in 2016

By Michelle L. Oxman, J.D., LL.M.

CMS announced an increase of about 1 percent in Medicare beneficiaries’ premiums, copayments, and deductibles under Medicare Part B and the premiums for individuals required to pay premiums for Part A coverage beginning January 1, 2016. Both the Part A premium and the Part B cost notices are scheduled for publication in the Federal Register on November 16, 2015, according to CMS.

Part A premiums. For individuals who must pay premiums, the premium for Part A coverage will be $411, up from $407 in 2015. Individuals age 65 or older who have had Social Security taxes or Railroad Retirement withheld from their wages for at least 40 quarters pay no premiums. Individuals with 30 or more quarters may pay a reduced premium of $226 per month, up from $224 in 2015.

"Hold-harmless" premium, uniform deductible. The premium for Part B coverage, which pays for physician, outpatient, durable medical equipment, and certain home health services, will vary depending on income and whether a beneficiary is collecting Social Security benefits. The premium for individuals receiving Social Security benefits will remain at $104.90 because they will not receive a cost-of-living increase in 2016. About 70 percent of Medicare beneficiaries are held harmless in this manner.

All Medicare beneficiaries enrolled in Part B will be subject to a deductible of $166. CMS estimates that about 52 million individuals will be enrolled in Medicare Part B during 2016.

Part B premiums. The hold-harmless provision will not apply to individuals who are not receiving Social Security or Railroad Retirement benefits, to dual eligibles, whose premiums are paid by state Medicaid programs, or to those who enroll in Medicare for the first time in 2016 or have higher incomes. The premium for individuals with incomes up to $85,000 and couples with incomes up to $170,000 will be $121.80. An income-related adjustment will be applied to individuals and couples at higher incomes, beginning at $48.70 for individuals with incomes up to $107,000 and couples with incomes up to $214,000. The increase tops out at $268, for a total premium of $389.80, for individuals with incomes above $214,000 and couples with incomes above $428,000.

These individuals and the state Medicaid programs would have been required to pay $159.80 per month in order to make up for missing reserves. However, the Bipartisan Budget Act of 2015 (P.L. 114-74) reduced the premium, saving these consumers and state Medicaid programs about $1.8 billion.

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