Rising Part B Medicare Premiums and No Cola in 2016

The 2016 review of Social Security and Medicare released by the Social Security Board of Trustees announced there would be no COLA for 2016 due to lack of inflation. According to an article on Bankrate.com,
“Social Security doesn't expect to pay any cost-of-living adjustment, or COLA, to beneficiaries in 2016 because inflation hasn't been high enough to justify it. In 2015, Social Security recipients got a measly 1.7 percent raise...But next year is almost certainly going to be worse -- zero percent -- because the Consumer Price Index for Urban Wage Earners and Clerical Workers, CPI-W, as calculated by the Department of Labor, has gone down since January.”
On the Medicare front, those enrolled in Medicare Part B will face a 52% increase in their premiums in 2016. According to StreetInsider.com, Part B enrollees may also see an identical increase in their deductible. This means about 1 in 70 Medicare enrollees will be affected by the price hike.
Medicare Part B pays for physician visits and outpatient services. The spike in Medicare B premiums is largely attributed to the fact that physician costs are rising faster than the prices of any other market in the economy. Additionally, Medicare expenses in 2014 ($613.3 billion) exceeded Medicare income ($599.3 billion). In order to keep premiums down, Medicare needs to incur a higher income than its expenses to help combat the rising costs of physician care.
For those not enrolled in Medicare Part B, a “hold harmless” provision in the federal law says that enrollee’s Medicare premiums cannot increase by more than the increase of their Social Security benefits in any given year. Because there is no COLA increase in 2016, these Medicare enrollees are safe from premium increases.
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