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What's in Store for Medicare's Part B Premiums and Deductible in 2016, and Why?

Issue Brief
  1. Centers for Medicare & Medicaid Services, "2016 Medicare Parts A& B Premiums and Deductibles Announced," November 10, 2015.

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  2. 2015 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.

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  3. The hold-harmless provision is described in Section 1839(f) of the Social Security Act.

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  4. Deductions can also be made from Railroad Retirement benefits, if applicable. Certain individuals are exempt from this requirement, including beneficiaries enrolled in both Medicare and Medicaid (“dually eligible” beneficiaries). See Section 1840 of the Social Security Act.

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  5. The projected 52 percent increase in the Part B premium does not reflect the growth rate in Part B per capita spending. Although the Trustees stated that overall Part B program spending was higher than expected, average Part B per capita spending grew at 2.7 percent in 2011 and 2012, 0.2 percent in 2013, and 4.5 percent in 2014, and is projected to grow at an average annual rate of 4.7 percent between 2014 and 2024. See 2015 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, Table V.D1.

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  6. The CPI-W is produced by the U.S. Department of Labor, Bureau of Labor Statistics.

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  7. Bureau of Labor Statistics, "Consumer Price Index – September 2015," News Release, October 15, 2015, available at http://www.bls.gov/news.release/cpi.nr0.htm.

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  8. Social Security Administration, “Law Does Not Provide for a Social Security Cost-of-Living Adjustment for 2016,” Press Release, October 15, 2015, available at http://www.ssa.gov/news/press/releases/#/post/10-2015-1.

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  9. Centers for Medicare & Medicaid Services, "2016 Medicare Parts A& B Premiums and Deductibles Announced," November 10, 2015.

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  10. Unpublished data from Urban Institute/DYNASIM.

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  11. 2015 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, Table V.B4.

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  12. Centers for Medicare & Medicaid Services, Department of Health and Human Services, "Medicare Program; Medicare Part B Monthly Actuarial Rates, Premium Rate, and Annual Deductible Beginning January 1, 2016," pre-publication version available at https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-29181.pdf; Federal Register, November 16, 2015 (forthcoming), available at http://federalregister.gov/a/2015-29181.

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  13. Juliette Cubanski and Tricia Neuman, “Medicare's Income-Related Premiums: A Data Note,” June 2015, available at https://www.kff.org/medicare/issue-brief/medicares-income-related-premiums-a-data-note/.

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  14. 2015 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Trust Funds.

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  15. Jack Hoadley, Juliette Cubanski, and Tricia Neuman, “Medicare Part D: A First Look at Plan Offerings in 2016,” October 2015, available at https://www.kff.org/medicare/issue-brief/medicare-part-d-a-first-look-at-plan-offerings-in-2016/.

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  16. The COLA also determines the percentage increases in Supplemental Security Income (SSI), veterans’ pensions, and railroad retirement benefits.

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