Medicare and misinformation

Columbia Journalism Review

Is my premium rising? A beat memo for reporters

By Trudy Lieberman

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.

The ACA also affected premiums seniors pay for Part D benefits—their drug coverage. And as with Part B, seniors with higher incomes will pay higher premiums for this coverage. From 2006, the time the drug benefit began, to 2011, premiums varied by which drug plan a senior chose, but seniors enrolled in the same plan within the same region of the country paid identical premiums. Now they don’t. This year about 3 percent of seniors who have the drug benefit (not all do) pay higher premiums; by 2019, about 8 percent will. This year the average monthly Part D premium is about $31, although the actual premiums also vary by the kind of plan, which is provided by private insurers. (Unlike other Medicare coverages, private insurers provide the drug benefit). Monthly premiums range from $15 to about $132.

Why the changes? Increased revenue from higher premiums along with cuts to Medicare—mostly in the form of payment reductions to hospitals and other providers—are part of a package of savings experts hope will reduce the cost of the Medicare program.

Higher premiums for Parts B and D also accelerate the shift occurring all across the healthcare system requiring consumers to pay more for their care. Some proposals floating around Congress would speed up the cost shift even more, by requiring even more seniors to pay higher Part B and Part D premiums. Income thresholds would be frozen after 2019, or perhaps permanently. Other proposals would increase the amount of healthcare expenses beneficiaries would have to pay out-of-pocket. The media haven’t touched those hot buttons yet, but seniors listening to the candidates might just want to know about them (I will write about them in coming days).

For now the conclusion of the Kaiser Family Foundation is a good place for reporters to start their reporting.

If the income thresholds are frozen over a longer period of time, then a growing share of the elderly and disabled people who would not be considered high income by today’s standards would face higher premiums and as the income-related premium amounts increase over time, they would consume a larger share of income.

So: Premiums for both Part B and D are rising, in order to reduce costs to Medicare, and as a result of actions by both political parties.

Who can afford these higher premiums and who can’t is an important line of inquiry, and more useful to readers than simply repeating political charges and countercharges.