Unless the U.S. Department of Health and Human Services intervenes, some Medicare beneficiaries will face a steep increase in their 2016 premiums.

Medicare’s trustees projected that for about 30% of the program’s beneficiaries, 2016 premiums would rise by 52% for Part B, which covers doctor visits and other types of outpatient care.

The projected increases result from a little-noticed intersection between the rules governing Medicare and Social Security.

Under the Social Security Act’s “hold harmless” provision, Medicare can’t pass along to most Social Security recipients a premium increase that is higher than whatever they would receive through Social Security’s annual cost-of-living adjustment.

With inflation so low, Social Security isn’t expected to pay a cost-of-living increase in 2016. So Medicare would be unable to pass any premium increase along to the estimated 70% of beneficiaries who will qualify for this “hold harmless” treatment in 2016. As a result, Medicare must spread the projected increase in its costs across the remainder.  See related article here

But while the final rates the government sets in the fall are typically close to the trustees’ predictions, HHS Secretary Sylvia Mathews Burwell has said she would search for ways to reduce the increase for affected beneficiaries. The final decision about 2016 rates “will be based on our preliminary projections today, subject to additional data, and the administration’s consideration of policy options,” she said last week.

The largest single group of people affected are the 3.1 million participants subject to higher Part B premiums because their incomes are above $85,000 (or $170,000 for couples). Within this group, the trustees projected that single individuals earning up to $107,000 (and couples earning up to $214,000) would have their 2016 monthly premiums rise from $146.90 a person this year to $223 in 2016. For those earning more than $214,000 (or $428,000 for couples), the projected increase is to $509.80 a month, from $335.70 in 2015.

Up to another 1.6 million people are potentially affected because they receive Medicare but have deferred claiming their Social Security benefits or aren’t eligible for those benefits. If they are paying the standard $104.90 a month for Medicare Part B this year, they will be charged $159.30 a month in 2016 if the trustees’ predictions come to pass.

A 52% increase from 2015’s rates would also apply to up to 2.8 million people who will be new to Medicare in 2016, the trustees projected.

The 52% premium increase also affects about nine million lower-income Medicare beneficiaries whose premiums are paid by state Medicaid programs. But in that situation, the increase is “a problem for state governments. It still is possible that there will indeed be a Social Security cost-of-living adjustment for 2016, if inflation picks up over the next few months.

And if that isn’t the case, the unusual disparity in 2016 Part B premiums between recipients with similar incomes could be smoothed out come 2017. Assuming Social Security recipients receive a cost-of-living adjustment in 2017, the “hold harmless” provision will affect a smaller portion of Medicare recipients—and so Medicare costs will be shared more equally. Indeed, the Medicare trustees are projecting that the base Medicare Part B premium will reset for everyone at $120.70 a month in 2017.

This isn’t the first time this has happened.

In 2010 and 2011, Social Security paid no cost-of-living increase. For those who fell outside the “hold harmless” protection, the base premium rose to $110.50 in 2010 and to $115.40 in 2011—even as those with the protection continued to pay at the 2009 level of $96.40. When Social Security resumed paying cost-of-living increases in 2012, everyone’s base premium reset at $99.90 a month, before rising to $104.90 in 2013 and remaining there ever since.

If you would like to speak to a Trusted Health Plan Advisor about this, or anything else related to Medicare, please contact Cruson Insurance Agency by clicking here.  You may also call (972) 896-3851.  Thank you.

 High-income retirees could see net benefits decline as their Medicare premiums rise

It looks like Social Security recipients will not see a cost-of-living adjustment (COLA) in their benefits next year. And some high-income retirees may actually see a net reduction in benefits in 2016 as their Medicare premiums, which are deducted from monthly Social Security payments, continue to rise.

The Social Security Administration will make official announcement about the 2016 COLA — or lack thereof — in October. That should give you plenty of time to get ready for some unhappy clients come January when they ask you — their financial adviser — why their Social Security benefits went down.

COLA HISTORY

Beginning in 1975, Social Security benefits began receiving automatic cost-of-living adjustments each year so beneficiaries' buying power could keep pace with inflation. Before that, it took congressional action to increase benefits.

Over the years, the method of calculating that increase has changed. Since 1983, COLAs have been based on increases in the Consumer Price Index for urban wage earners (CPI-W) from the third quarter of the prior year to the corresponding quarter of the current year.

Due to slowing inflation over the past year, the CPI-W during the first two quarters of 2015 has actually declined from a year ago. So unless inflation surges during the remainder of the summer, it is unlikely that the third quarter of 2015 will surpass the third quarter of 2014. Translation: It doesn't look like there will be an increase in Social Security benefits for 2016.

The projection of a 0% COLA for 2016 was echoed in the recently released Social Security and Medicare Trustees report for 2015.

For clients who have been retired for several years, it will be like déjà vu all over again. Similar no COLA years occurred in 2010 and 2011 — the only two times since automatic COLAs were instituted in 1975 that Social Security recipients received no bump-up in benefits. Those two years of no COLAs was followed by a 3.6% hike for 2012, and more modest increases of 1.7% in 2013, 1.5% in 2014 and 1.7% in 2015.

It may give your clients some solace to note that Social Security trustees project a 3.1% COLA for 2017 — but that's a long way off and a lot can change between now and then.

HOW MEDICARE FITS IN

Normally, Medicare Part B premiums are deducted from monthly Social Security benefits. In 2015, most Medicare beneficiaries pay $104.90 per month for Medicare B, which covers outpatient services and doctor visits. Medicare A, which covers hospitalization, is free.

High-income retirees — individuals with a Modified Adjusted Gross Income over $85,000 or married couples with a combined MAGI of $170,000 or more — pay higher monthly premiums for both Medicare B and the Medicare D prescription drug program, and in some cases, a lot more. MAGI includes annual adjust gross income plus tax-free interest.

There are five Medicare premium brackets. In 2015, the surcharges range from $42 to $230.80 per month on top of the standard $104.90-per-month premium. These premiums apply per person, so married couples where both spouses are Medicare age would pay twice as much. The income is based on your latest tax return, so a 2014 tax return filed in 2015 will be the basis for the Medicare premiums paid in 2016.

The 2015 Trustees report projected a 52% increase in Medicare Part B premiums for 2016. The actual increase will be announced by the Department of Health and Human Services in the fall.

If there is an increase in the Medicare Part B premium, only some people will pay it. That's because the Social Security Act contains a “hold harmless” provision that protects the vast majority of Social Security beneficiaries from paying a larger increase in Medicare Part B premiums than they receive in Social Security COLA increase in order to avoid a reduction in their net Social Security benefit.

No increase in Social Security benefits means no Medicare premium hike for most beneficiaries.

But there is an exception to the hold-harmless provision, and it is likely to affect many high-income advisory clients. Anyone who is subject to Medicare premium surcharges is not protected from Medicare increases. Neither are individuals who are newly entitled to Social Security in 2016 or those who are enrolled in Medicare but who have not yet started to collect Social Security benefits.

Bottom line: Many of your older clients may find that their Medicare premiums go up next year while their Social Security benefits hold steady, resulting a net decline in their monthly retirement income.

No COLA increase for 2016 would mean that the taxable wage base would remain at $118,500 for most workers next year. However, the 1.45% Medicare portion of the payroll tax would continue to apply to all wages, even those above the wage base amount, and the 0.9% Medicare surtax would be added for workers with earnings over $200,000 for single filers and $250,000 for joint returns.

(972) 896-3851

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Are you the kind of shopper who reads reviews or looks at ratings before you make a purchase? Wouldn’t it be helpful to have the same kind of ratings when choosing a home health agency?

Choosing a home health service can be overwhelming. Agencies differ in the safety and quality of care they provide. That’s why we’ve made it easier to use the information on our Home Health Compare site by adding quality of patient care star ratings.

Compare websites are a valuable source of information about the quality of health care providers and facilities. The quality of patient care star ratings we’ve just added to the Home Health Compare website summarize each agency’s performance across 9 quality measures, including things like:

• Managing daily activities
• Managing pain and treating symptoms
• Treating wounds and preventing pressure sores (bed sores)
• Preventing harm
• Preventing unplanned hospital care

Agencies get a rating from 1 to 5 stars, with 1 as the lowest score and 5 as the highest. Agencies get a higher star rating when they follow recommended care practices for more patients, and when more of their patients show improvement.

Sharing patients’ experience of care through star ratings is just one example of how we’re committed to helping you make health care decisions based upon available information. We just made it easier to use the information on our Hospital Compare site by adding star ratings for patients’ experience of care. Our Nursing Home Compare site already uses star ratings to help consumers compare nursing homes and choose one with quality in mind. Physician Compare has started to include star ratings in certain situations for physician large group practices, and we added star ratings to our Dialysis Facility Compare site to help to make data on dialysis centers easier to understand and use.

The methodology for calculating the Quality of Patient Care Star Rating is based on a combination of individual measure rankings and the statistical significance of the difference between the performance of an individual HHA on each measure (risk-adjusted, if an outcome measure) and the performance of all HHAs. An HHA’s quality measure values are compared to national agency medians, and its rating is adjusted to reflect the differences relative to other agencies’ quality measure values. These adjusted ratings are then combined into one overall star rating that summarizes performance across all 9 individual measures. The details of the calculation are included in the methodology report referenced above.

For more information, please contact Cruson Insurance Agency at (972) 896-3851 or click here to send a request to a someone contact you.

Posted by Medicare Made Clear

When will your red, white and blue Original Medicare member card arrive in the mail? It depends on a number of factors.

Enrollment in Original Medicare and the receipt of your member card will be automatic if you meet one of the following conditions.

• If you are turning age 65 and receiving Social Security Insurance or Railroad Retirement Board benefits, your Medicare card will arrive three months before your 65^th birth month. Coverage usually begins the first day of your birthday month. If your birthday is on the first day of the month, coverage usually starts the month prior.

• If you are under age 65 and have received social security disability benefits for 24 months, your Medicare card will arrive during the 25^th month you have been receiving disability benefits. Coverage starts at the beginning of the 25^th month you have been receiving disability benefits.

• If you have Lou Gehrig’s disease (Amyotrophic Lateral Sclerosis/ALS) and begin receiving your social security disability benefits, you will receive your Medicare card the first month your disability begins. Coverage also starts the first month your disability begins.

If you do not qualify for automatic enrollment, you’ll need to enroll in Original Medicare in order to receive coverage and your member card. For instance:

• If you are turning 65 and you are not receiving Social Security Insurance or Railroad Retirement Board benefits, you will receive your member card once you complete your Original Medicare enrollment. Coverage usually begins the first day of your birthday month. If your birthday is on the first day of the month, coverage usually starts the month prior. To enroll in Original Medicare, apply online at Social Security or call 1-800-772-1213; TTY 1-800-325-0778 (7 a.m. – 7 p.m., local time, Monday – Friday.

• If you have End-Stage Renal Disease, Permanent kidney failure requiring dialysis or a kidney transplant, you will receive your member card once you complete your Original Medicare enrollment. Coverage starts the first month your disability begins. To enroll in Original Medicare, apply online at Social Security or call 1-800-772-1213; TTY 1-800-325-0778 (7 a.m. – 7 p.m., local time, Monday – Friday.

• If you live in Puerto Rico and receive social security benefits from Railroad Retirement Benefits, you are automatically eligible for Part A. If you also want Part B, you need to apply for it. You will receive your new card once you complete your Part B enrollment. Fill out this Application for Enrollment in Part B.

• If you need to replace a lost or damaged Medicare card, request one online at medicare.gov or call 1-800-772-1213. TTY users should call 1-800-325-0778. Your card should arrive in the mail in about 30 days.

If you live outside the United States and its territories, contact the nearest U.S. Social Security Insurance office, U.S. Embassy or consulate, or the Veterans Affairs Regional Office (VARO) in the Philippines.

If you have a Medicare Advantage plan or other private insurance plan, your insurance card’s arrival date may differ. The best place to find information about your insurance card is to call the insurance provider directly. Call your plan’s customer service number and speak to a representative.

All Medicare enrollment guidelines must be followed to avoid late enrollment penalties.

For more information, explore MedicareMadeClear.com or contact the Medicare helpline 24 hours a day, seven days a week at 1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048. You may also contact Cruson Insurance Agency at (972) 896-3851 or www.crusoninsurance.com.

Resources:

Not Sure What Kind of Medicare Coverage You Have? It’s in the Cards: Medicare Made Clear

Some People Get Part A & Part B Automatically: Medicare.gov

Medicare & You: Get the official U.S. government Medicare handbook.

by Medicare Made Clear

Did you buy your health insurance through the Health Marketplace? If you did, you’ll be happy to know it won’t affect you at all when you’re ready to sign up for Medicare.

Likewise, if you already have Medicare, the Health Marketplace has zero impact on your current Medicare coverage. As long as you have at least Medicare Part A (hospital coverage), you meet the coverage requirements and do not need a Marketplace plan. In fact, it’s against the law for someone who knows you have Medicare to sell you a Marketplace plan. This is true even if you have only Part A or only Part B.

If you’re getting ready to sign up for Medicare, here are five steps to help you get the enrollment process started.

1. Know when you should sign up for Medicare. This is called your Initial Enrollment Period (IEP). The exact dates of your IEP depend on your date of birth or on the date you began receiving disability benefits. Learn more.

2. Know how to enroll. Medicare enrollment may or may not be automatic. Learn more.

3. Understand your healthcare needs. Your lifestyle, medical history and plans for the future are all things to think about before making a decision about Medicare. Learn more.

4. Know how to compare your Medicare choices. You’ll want to explore and compare all of the choices available to you, including Original Medicare and private Medicare plans. Learn more.

5. Know how to choose a Medicare plan. Watch a video.

6. Avoid a health coverage gap. Don’t cancel your existing health insurance until you are sure of your exact Medicare coverage start date.

See some real life examples of how four people choose their Medicare plans.

If you need help understanding your plan choices, contact your local State Health Insurance Assistance Program (SHIP). SHIP is a state-based program that offers local one-on-one counseling to Medicare beneficiaries on a wide range of Medicare, Medicaid and Medigap matters.

For more information, contact the Medicare helpline 24 hours a day, seven days a week at 1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048, or contact Cruson Insurance Agency at (972) 896-3851.

Resources:

Prepare for Initial Enrollment: Medicare Made Clear

Medicare & the Marketplace: Medicare.gov

Medicare & You: Get the official U.S. government Medicare handbook.