Medicare Premiums Set to Soar for Small Group of Unlucky Seniors

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The New York Times reports today that Medicare premiums may soar next year even though inflation is low and medical costs have been relatively tame.

Why? Well, Medicare actuaries predict that Part B spending is expected to go up a bit more than they initially projected, and premiums are supposed to cover one-fourth of spending. However, for 70 percent of Medicare recipients premiums are linked to Social Security benefits, which are not expected to rise at all thanks to low inflation. This means that the entire burden of paying for the increased spending will fall on the other 30 percent of Medicare recipients. For these people, premiums will rise $648 in 2016.

That’s a lot of money for someone living on $15,000 per year. So what are we going to do about it?

The cost of avoiding such big premium increases, $7.5 billion by some estimates, could be a problem for conservative Republicans. Aides to Mr. Boehner have told Ms. Pelosi’s staff members that the cost would have to be offset by savings elsewhere in the federal budget….Republicans worry that Democrats will depict them as waging a “war on seniors” if they do not go along with legislation to soften the effect of any premium increase, perhaps by using general revenue to plug the gap. A struggle over Medicare would add to fights expected this fall over legislation to raise the federal debt ceiling, prevent a government shutdown and keep money flowing for highway projects.

In other words, the usual: we’ll squabble over it like small children and then eventually patch together some kind of half-assed solution after Republicans threaten to hold their collective breaths until their faces turn blue. That’s American exceptionalism, baby.

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