Tag Archives: COLA

2013 Medicare premium increase will cut into COLA for Seniors

The anticipated 2013 1.7% cost-of-living adjustment (COLA) for Social Security recipients will likely be wiped out by an expected 7-9% in Medicare part B premiums next year.

Private analysts expect the $99.90 part B premium for incomes up to $85,000 to rise by as much as $9 while the government’s projection anticipate a $7 per month increase. At around $100 per year, this could cut into the small COLA increase that is forecast.

An additional impact to seniors will be the expected rise in prescription drug plans (PDPs). According to a September report from Alvalere Health, “Seven of the top 10 prescription plans are raising their premiums by 11 to 23 percent.”

Between the PDP and Medicare part B increases, the entirety of the COLA increase could get almost completely eaten up by healthcare costs. Medicare officials are advising seniors to shop carefully for drug coverage to avoid the high increases.

The COLA increase will also raise the income ceiling for Medicare recipients. In 2012, the ceiling was $110,100 and will increase to $113,700 for 2013.

Medicare open enrollment started on October 15th and continues until December 7th, 2012. Any changes to Medicare selections will take effect on January 1st, 2013. During open enrollment, seniors can switch from   Medicare parts A and B (traditional Medicare) to a Medicare Advantage plan (part C) or go from Medicare Advantage back to a traditional plan. Medicare supplementary plans can be changed/elected at any time during the year.

The COLA increase is computed by the government using the CPI-W figures in the third quarter of the current year in comparison to the third quarter of the previous year. CPI-W measure price inflation of those working – known as CPI for Urban Wage Earners and Clerical Workers. Some Medicare analysts are pushing to have a new CPI measure, CPI-elder, be used to compute COLA as it takes senior costs more into account by weighting healthcare expenditures heavier.

 

 

 

Medicare Premium Increase Means Trouble for Seniors, States and Workers

EmergencyA large portion of Medicare recipients and individual States should ready themselves for what should not be all that shocking: Obamacare didn’t bend the cost curve down – at all. Medicare premiums for 2012 are set to rise to $113.80 per month, an almost 20% increase over the $94.60 2011 premiums,  which will hit fixed-income earners and cash-strapped States with an increasing burden.

Social Security recipients will be the first hit. As an Associated Press wire reported, the first COLA increase in years will likely be wiped out by increasing health care premiums.

“The government is projecting a slight cost-of-living adjustment for Social Security benefits next year, the first increase since 2009. But for most beneficiaries, rising Medicare premiums threaten to wipe out any increase in payments, leaving them without a raise for a third straight year.”

Secondly, those low-income earners on Medicaid will not be hit with the increasing premium – it will instead be passed on to the state providing the Medicaid. This will cause a pass-thru cost to state income and sales tax payers. As almost all states are facing tremendous shortfalls due to entitlement mismanagement such as this, more and more costs will be passed on to taxpayers and more services will have to be cut to avoid default.

In 2010, Medicare premiums were the same as they were in 2009. All this before Obama’s health care reform was passed. Now that we’ve had more than a year of liberal health care planning and management, a 20% increase in premiums comes due and Donald McLeod from the Center for Medicare and Medicaid Services hinted that even the Obama administration wasn’t prepared for the increase. Mr. McLeod pointed out that the President’s budget projected Medicare premiums to be $108.20, not the $113.80 that CMS expects.