Understanding the 2016 Medicare Part B premiums

Prior to the Bipartisan Budget Act of 2015 , all indications pointed to a pretty significant increase in the 2016 Part B premiums for Medicare. However, the increase was much less than expected in part because of the compromise in the Budget Bill. The Kaiser Family Foundation released a very helpful issue brief on November 11, 2015, explaining  the developments and the impact on beneficiaries.  What’s in Store for Medicare’s Part B Premiums and Deductible in 2016, and Why? explains the premium increase, the hold harmless provision and a $3 repayment surcharge to make up the deficit Part B will incur in 2016 because of the lower premium. (“includes a $3 repayment surcharge, which will be added to monthly premiums over time to cover the cost of the reduced premium rate in 2016.”)

The brief explains the hold harmless provision, identifies the categories of beneficiaries who will have to pay the higher premiums (and why) and the amount of premiums paid by higher income beneficiaries. The brief also offers a projection for 2017 and concludes that but for Congressional intervention, “in the face of flat Social Security benefits and rising out-of-pocket costs, many people on Medicare could have greater difficulty affording their medical care costs in the coming year.”