Happy Veterans’ Day

Happy Veterans’ Day to all, especially to veterans, of course.

Yesterday, post election of course, the Centers for Medicare and Medicaid Services announced Medicare Part A and Part B premiums and beneficary cost sharing for 2017.  As discussed, there’s an anomaly in the complex Medicare law affecting federal annuitants.  Federal annuitants who retired before 2016 and have their Medicare Part B premiums withheld from Social Security benefits — those annuitants receiving FERS benefits or who had Medicare qualifying private sector employment following their federal retirement — are in a protected category. Those post 2015 annuitants and annuitants receiving CSRS benefits (the youngest group and the oldest group oddly enough) fall outside the category.  The announcement explains that

Social Security benefits will be 0.3 percent for 2017. Because of the low Social Security COLA, a statutory “hold harmless” provision designed to protect seniors, will largely prevent Part B premiums from increasing for about 70 percent of beneficiaries. Among this group, the average 2017 premium will be about $109.00, compared to $104.90 for the past four years. 

For the remaining roughly 30 percent of beneficiaries, the standard monthly premium for Medicare Part B will be $134.00 for 2017, a 10 percent increase from the 2016 premium of $121.80. Because of the “hold harmless” provision covering the other 70 percent of beneficiaries, premiums for the remaining 30 percent must cover most of the increase in Medicare costs for 2017 for all beneficiaries. This year, as in the past, the Secretary has exercised her statutory authority to mitigate projected premium increases for these beneficiaries, while continuing to maintain a prudent level of reserves to protect against unexpected costs. The Department of Health and Human Services (HHS) will work with Congress as it explores budget-neutral solutions to challenges created by the “hold harmless” provision. * * * 

Medicare Part B beneficiaries not subject to the “hold harmless” provision include beneficiaries who do not receive Social Security benefits, those who enroll in Part B for the first time in 2017, those who are directly billed for their Part B premium, those who are dually eligible for Medicaid and have their premium paid by state Medicaid agencies, and those who pay an income-related premium. These groups represent approximately 30 percent of total Part B beneficiaries.

CMS also announced that the annual deductible for all Medicare Part B beneficiaries will be $183 in 2017 (compared to $166 in 2016). Premiums and deductibles for Medicare Advantage and prescription drug plans are already finalized and are unaffected by this announcement.

Believe it or not, the new is better than the prognostications because CMS is drawing down from Medicare reserves.  A Wall Street Journal article explains that

The program’s reserve ratio, now 13%, is just below the 14% target recommended by the program’s actuaries, according to CMS. 

“It seems like a bit of good news compared to what we were expecting. A 10% increase is still an increase, but it’s less than” the initial 22% forecast, said Juliette Cubanski, associate director of the Henry J. Kaiser Family Foundation’s program on Medicare policy.

Premiums for higher income Medicare beneficiaries are higher than these figures. Those amounts are found in a table contained in the CMS announcement.

That likely takes one item off of Congress’s lame duck session plate.  The Congressional Budget office potentially added another item to that plate by issuing yesterday its report on the House Oversight and Government Reform Committee’s bipartisan postal reform bill, H.R. 5714. CBO reports provide budget impact scoring on proposed legislation. Issuance of the report allows the bill to move forward — in this case to the Ways and Means Committee for consideration of the impact on Medicare of the bill’s full integration of the Postal Service Health Benefits Program with Medicare.  Also when the House Oversight Committee passed the bill in early July the Committee leadership explained that they would be refining the bill over the summer.  The point is that it is now possible for Congress to push reform over the goal line if desired and time permits.

The biggest item on the lame duck session is extending the continuing appropriations bill beyond December 9. Given the election returns, I doubt that this will present a problem so there may be time to consider postal reform.  Time will tell.