Two weeks ago a Midwest businessman sent an email to a long list of his senior friends warning that their Medicare Part B premiums would reach $247 a month by 2014. “These are provisions incorporated in the Obamacare legislation,” he wrote, and they “are purposely delayed so as not to cause Obama problems in the 2012 re-election campaigns.” He urged recipients to forward the email to “all seniors you know so they will know who’s throwing them under the bus. Remember This In November 2012 and vote!!!”
It sounded like a GOP campaign ad, and it may well have political roots for all I know, but it was part of a mass email that “has been circulating since before the 2010 elections” and “has no basis in fact,” wrote Patricia Barry, senior editor of the AARP Bulletin, last December. The message was still circulating in early July, when Kelly Greene of The Wall Street Journal reported that Journal readers had contacted the paper wanting to know if those numbers in the mass email were true. “The short answer is no,” Greene wrote. She went on to report that the Part B premiums for 2013 and 2004 have not yet been set.
This is another example of Medicare misinformation, and shows what reporters—and a very interested public—are up against as they try to understand and explain Medicare, the social insurance program that pays for healthcare for nearly 50 million Americans.
Lately, press coverage of Medicare has mostly focused on the back and forth between the Obama and Romney camps, in the wake of the president’s visit to Florida last week. For the most part, that coverage has been unhelpful to seniors—or anyone trying to figure out what is changing about Medicare.
But a great many people want to know about both how the changes might hit their wallets and purses, and journalists, not politicians, are going to have to shine the light. So in the interest of helping that process along, what follows is another of my Medicare beat memos.
Medicare can get complicated, so fasten your seat belts. But the bottom line is that some seniors are paying more—and others will pay more—for their Medicare benefits, because of changes called for both by the Affordable Care Act and by changes called for in the prescription drug law—the Medicare Modernization Act—passed in 2003, which gave seniors coverage for their medicines.
These changes affect both Medicare part B, which pays for doctor and lab services and outpatient hospital care, and part D, which covers pharmaceuticals. Both these benefits are financed partially by premiums paid by seniors themselves. And the real story is that seniors with higher incomes will be paying higher premiums for both their Part B and Part D services in the coming years. As for the political angle, it is worth noting that both Democrats and Republicans pushed the measures that will raise those premiums.
First, Part B. And, sorry, but this can be confusing: Way back in 2003, the law that gave seniors the drug benefit (Part D) also called for people with more income to pay higher Part B premiums. Before the Medicare Modernization Act, as the law is called, all seniors paid the same benefit for Part B services. But beginning in 2007 about two million seniors paid a higher premium for them as a result of the law, which was basically a Republican plan supported by some Democrats.
The income threshold that determined who paid the higher premium was indexed to inflation, so that about 5 percent of all Medicare beneficiaries would pay a higher premium each year, on a sliding scale. (In 2012, the income-related premium ranges from about $140 to $320 and affects individuals with incomes equal or greater than $85,000 and families with incomes over $170,000.)
The Affordable Care Act (ACA), passed in 2010 and recently ruled constitutional, changes the rules to require even more seniors to pay higher Part B premiums. It did that by freezing those income thresholds used to determine who pays more. Before the change, the threshold rose with the rate of inflation; now that the threshold is frozen, more people will be affected as their incomes inflate—at least from 2011 through 2019 when the old rules are scheduled to return By 2019, about 10 percent of all seniors will be paying higher Part B premiums.