Medicare 2017

CMS has determined the costs for 2017 for Medicare Part B and the penalties for not having creditable drug coverage, or Part B due to late enrollment.
Let’s look at Medicare Part B premium. My agency has been selling Medicare plans since 2004 and the cost of Part B has skyrocketed from $58.50 to $134.00 per month for 2017.
We understand the cost of everything is doing up but what we resent is CMS fooling Americans with the higher costs. The law specifically says we cannot have a price increase for Part B premiums unless seniors get a COLA (cost of living increase) on their social security monthly payment. Congress and CMS gave seniors a COLA for 2017 which meant instead of paying $104.90 for Part B premiums we get to pay $110 per month. The difference of $5.10 equals the COLA we received on our social security. What a scam being perpetrated on seniors. Give us a COLA and take back the exact amount in Part B premium increase. Doesn’t sound very smart but it really is. That COLA allowed CMS to increase the Part B for new enrollees to $134.00 per month from the $121.80 from 2016. With 10,000 seniors daily becoming eligible for Medicare the increase represent a significant source of new revenue for the program. Where are the increased revenue going?
Instead of raising the premiums, CMS should concentrate on Medicare fraud which exceeds $60 billion dollars annually. CMS should also concentrate on changing the Part D law which prohibits CMS from negotiating drug prices. Then negotiate lower drug prices for everyone. Without those changes there cannot be any reform.
Late enrollment fees are also increasing as the price of Part B continues to rise, so does the fine. The fine for not having Part B coverage is 1% per year based on the then Part B premium. Your Part B effective date is extended out to July 1st and you must sign up for that coverage between January and March annually. So the 2017 cost of Part B for a new enrollee is $134.00 per month. 1% of that is $16.08 per month or $192.96 annually. As the premium goes up so does the fine. These fines are for the rest of your life. Consider someone who chose COBRA instead of Medicare when they were eligible. Remember COBRA is not considered to be creditable coverage even though federal law says it is. The fine goes back to the date you became eligible for Part B and continues for life.
The penalties for not having a creditable drug plan has also increased. Yes, the 1% remains the same but it is based on the average price of a drug plan in the US. The average price of a drug plan nationally has again increased to $35.63 up from only $30 a couple of years ago. As the average price increase so does the fine. Consider someone who has not had a drug plan for 5 years. That’s a 60% fine based on the average cost of a drug plan nationally. That means that the fine is 60% of $35.63 added to the cost of the drug plan chosen. Let’s say someone has the lowest priced plan @ $17 per month. That means the actual cost monthly is $21.38 plus the cost of the plan or $17.00. You are then paying $38.38 or more than double the cost of the plan for coverage. Medicare rules dictate that even if you are not taking any medications you must have a drug plan or be fined for the rest of your life.
These type of arbitrary decisions by CMS are counterproductive to all seniors and should be eliminated. The cost for seniors is becoming unaffordable and needs to be resolved before we all go broke.

Len Barend, The Barend Agency Inc.


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