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Large 2017 Medicare premium increase projected

Written by Steve Findlay

Note: For information on Medicare premiums in 2017 click here. The post below explains why Medicare premiums are increasing.

Some people with Medicare could face a 20% increase in their Part B premiums in 2017 unless Congress intervenes this fall and prevents it. The warning of the increase came in late June in the annual report of the Medicare Trustees to Congress, on the financial state of the program.

The trigger for the increase is complex but has to do in part with increasing costs in Part B, which covers doctors visits and other types of outpatient care. A 2015 law that prevented premium increases for 2016 for most people with Medicare collecting Social Security benefits is a contributing factor in the increase.

The Trustees report indicates that up to a third of people paying $121.80 a month for Part B in 2016—up from $104.90 in 2015 for many—could see another increase to as much as $149. Congress may view that as too significant an uptick in a short period and move to limit it, especially in an election year.

Increases of the same magnitude or more could be in store for wealthier people with Medicare, too. Since 2007, individuals earning more than $85,000 and couples earning more than $170,000 a year—about six percent of the Medicare population—pay substantially higher premiums than everyone else with Medicare.

Medicare notifies people of their Part B premium changes for the following year in the fall, before Medicare open enrollment, which occurs in November and December.

Part of the reason for the increase is that all Medicare costs, including for Part B, are trending upwards as more baby boomers enter the program and healthcare costs have again ticked up. For example, Part B costs rose an average 5.6% a year from 2010 to 2014; that average rate of rise is projected to increase to 6.9% a year from 2015 to 2020.

The average per person cost is projected to rise from $12,925 in 2016 to $19,400 in 2025. That reflects an average annual rate of increase over the next decade of almost three times what it was in the years 2010 to 2015 (4.3% versus 1.5%).

At the same time, Medicare enrollment is projected to rise from 57 million today to 73 million in 2025 as 10,000 baby boomers enter Medicare every day.

As a result, the Medicare hospital trust fund (Part A of the program) is projected to be insolvent by 2028, two years earlier than the Trustees projected last year, the Trustees said.

Even so, they expressed mild optimism that the Affordable Care Act (Obamacare) and several other recent laws were constraining the overall growth in healthcare costs, even as they asserted strongly that more needs to be done. In their words: “Notwithstanding recent favorable developments, current-law projections indicate that Medicare still faces a substantial financial shortfall that will need to be addressed with further legislation. Such legislation should be enacted sooner rather than later to minimize the impact on beneficiaries, providers, and taxpayers.”

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16 Comments

  • It is time that more attention was spent controlling price gouging by pharmaceutical companies. That would do a lot to control prices.

    • Yes, my Hep C therapy costs $500 a pill, 7 days a week, for 12 weeks. That’s outrageous. It’s not fair at all.

  • I wonder if they will claim again that the cost of living is not increasing, and therefore we’re not entitled to a COLA increase.

    • I say the Congress and Senators do not need a raise. Need to make them take a pay cut instead. Then there should be plenty of money to distribute among the people of this USA

  • The prices on several of the meds I take on a regular basis went up 700% this year. Now you’re telling me my Medicare premium may increase next year. Since my income from Social Security is apparently locked in place it seems reasonable that Medicare should lock premiums and medicine co-pays as well.

  • As you read on, keep in mind that these projected increases have not been formally adopted. Further, there is not a lot that affected people can do to avoid them. However, by the time 2017 premiums are set this October, it will be too late for even the limited responses I’ve laid out below.

    • I give up. What limited responses – I don’t see even a list of limited responses. FYI – I live in Texas and our “representatives” all adhere strictly to the GOP agenda. They don’t and have never represented me.

  • I have already received notice from my second coverage that as of AUG 1st it is going up almost $20 per month. Now come one folks it is NOT even the first of the year and yet raises are already starting. Are we going to get a nice raise in 2017 I highly doubt it, but Congress will see to it they get their raise it will NOT matter if they are Democrats or Republicans

  • My check on the third is spent before it’s in my account. If go to the supermarket once a month I’m doing good. I’m at the food bank every month. My meds got so high I had to go to mail ordering them. The COLA needs to be calculated by what our needs are, not by what workers purchase. By next week my bank account will be empty.

      • It is, but the formula for calculating CPI formula is heavily weighted for OIL. It’s biased and also considers if apples rise in price they theorize people will buy something cheaper. BLS dot GOV is outdated and tied to the federal reserve boggie of nor more than 2 percent. A form of manipulation, no doubt

  • So so sad. We are to be living in one of the greatest nations and yet here we go again. The rich get richer. 2 dollar cola increase, really. Just received letter from BCBS. Increasing supplemental from $ 122.86 to
    $ 188.92 per month. I had the cheapest policy. No prescription coverage. As it is, I can only spend $28.34 per week on food. The remainder goes for bills. Michigan property taxes are high, along with outrageous auto insurance and homeowners ins. Plates for 2 very old vehicles $284.00 a year. Shame on our government. Have to get a job so I can eat!

  • Because I turned 65 in 2015 my Medicare part B premium is $121.80. and now because I’m not collecting social security my premium will be $134.00

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