Good news! We could all use some these days, right? Well if you are a Medicare beneficiary enrolled in Part B, here you go. Your Part B premium increase next year will be about $4.
Last week, House Speaker Nancy Pelosi’s office announced that Congress had reached a budget agreement which would add enough funds to Medicare to keep Part B premium increases largely in check for the next year. This is especially welcome news, considering that the Centers for Medicare and Medicaid Services had previously calculated that 2021 premiums could increase by as much as $50 per month from the current 2020 base premium of $144.60. Such a single-year increase would have been larger than all the increases of the previous decade combined, and could leave many with limited means unable to pay. This alarming projection was largely in response to increased emergency Medicare spending to battle the COVID-19 pandemic.
The Speaker’s office said that premium increases were expected to average around $4 per month instead of the previously projected $50, which is especially important to the roughly 2/3 of Medicare beneficiaries who have the premium deducted from their monthly Social Security income. The Social Security Administration last week announced a 1.3% cost of living adjustment for 2021, which will average around $20 per month for most recipients, meaning that recipients may actually get to see a little bit of that increase in their pockets. It also means that the “hold harmless” provision won’t kick in, meaning that extra costs above the COLA won’t be redistributed to beneficiaries who are not yet drawing Social Security, and that’s good for everybody.
The annual Medicare Part B premium increase has been one of the fastest-growing costs of retirement in recent years, increasing 218% in the last 20 years, compared to a corresponding 54% inflation rate. It increased 7% last year alone. So this relief will certainly come as welcome news to seniors at a time they need it most. Congress finally did something right.
As always, contact us with your concerns about anything to do with your Medicare.