Most seniors won't see the monthly premiums they pay for Medicare jump in 2017.
Because inflation has been low, seniors are not slated for a major cost-of-living adjustment in Social Security benefits. And federal law prohibits Medicare from raising its premiums above the rate of the increase in Social Security benefits under the "hold harmless" provision.
But there is a substantial minority –– perhaps 30 percent, according to the Wall Street Journal –– who are exempt from that protection.
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They are exempt for a number of reasons, most commonly because their incomes are too high or because they have deferred or do not receive Social Security benefits.
Individuals with incomes above $85,000 or couples with incomes above $170,000 pay much higher premiums than other beneficiaries, and when inflation prevents the government from raising premiums for most seniors, it turns to this small group (about 6 percent of all Medicare beneficiaries) to pay for the steadily rising cost of health care.
However, there is also a group of Medicare beneficiaries who will be hit by a premium increase because their incomes are low enough to qualify for both Medicare and Medicaid. The latter program helps them pay their Medicare premiums.
Medicare has projected that premiums for the exempt group may rise more than 20 percent next year.
However, Congress can delay or reduce the scheduled increase. It did so last year, raising premiums for the exempt group by 16 percent instead of the anticipated 52 percent.
Like most other U.S. health programs, Medicare is threatened by the rapid rise in health costs. However, the problem that is unique to Medicare is that it is not able to charge its beneficiaries more as long as inflation (and hence Social Security benefits) remains low.
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