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Honored Social Butterfly

2021 Part B Premiums - Gonna Be A Little Tricky This Year

The 2021 Medicare Part B Premiums are not out yet but Congress has already passed a limit on them.

 

On 09/28/2020, Congress passed a provision to limit a possible (Medicare Part B) premium increase to 25% of what it would be otherwise is included in a short-term budget bill.

 

CNBC:  10/01/2020 - Congress caps Medicare Part B premium spike for 2021

 

The COLA for 2021 is 1.3% of your total SS check - let's say on average that would be about an additional $ 20 to your benefit.  By the SS Law, simply put, any increase in Part B premiums cannot make your SS benefit  $$ go down from one year to the next - so there is already this limit - which normally, the Part B premiums would be limited to that $ 20 (or below)

 

Now with this new (but temporary one) Part B premiums would be limited to 25% of that increase limit - in this case, about $5.00.

 

The way Part B works is that beneficiaries pay about 25% of the program's cost in premiums.  These premiums go into a fluctuating Trust Fund of in (premiums) and out (medical cost) monies called the SMI Trust Fund (Supplemental Medical Insurance) -  the other 75% of the cost of Part B medical care is paid by the government out of general funds. 

 

Nowadays, we are probably very lucky that the previous limit is there (by SS law) and now we seem to also be blessed with this newest (but temporary) limit.  I say temporary because the bill only covers 2021 - I think until Sept 30, 2021 - the end of the government's fiscal year.

 

But this worries me somewhat because we know that because of Covid-19, medical cost (Part B as well as Part A) have been high and well, folks, somewhere down the line this is all gonna catch up with us in premium cost.  And who knows what we will do about Medicare Part A and it's financial problems - that the Hospital portion Trust Fund that comes from payroll taxes.

It's Always Something . . . . Roseanna Roseannadanna
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