The Sound Bite:

The Affordable Care Act (ACA) raises Medicare Part B basic monthly premium to $247 in 2014

Fact or Fiction?

Fiction. Medicare Part B premiums are set each year in the fall based on a formula established by Congress in 1997. The claim that premiums for Medicare Part B, which pay for doctor’s visits and other outpatient costs, will more than double by 2014 is simply a myth -- 2013 premiums have not been set yet.

The genesis of the myth, which appears to be politically motivated, was in 2010 when emails began circulating to encourage voters, especially seniors, to vote out elected officials who supposedly raised their wages and increased Medicaid premiums to $285. In 2011, a similar message began circulating. The email claimed that Congress gave themselves a $3,000 a month cost-of-living adjustment while “Obamacare” is set to increase premiums to $247 in 2014.

Currently, the Medicare Part B premium each month for 2012 is $99.90. According to FactCheck.org, a project of the Annenberg Public Policy Center, the Centers for Medicare & Medicaid Services’ (CMS) Office of the Actuary projects Medicare Part B standard premiums at $112.10 and $117.10, for 2013 and 2014 respectively. It’s worth noting that these projections were released February 2011 which estimated 2012 premiums to be at $108.20 – higher than the 2011 standard premium of $99.90.

The formula used to set Part B premiums is from the 1997 Balance Budget Act, which takes into account the total Medicare cost of the previous year. Beneficiaries are responsible for paying for 25 percent of Part B costs, with the government responsible for the other 75 percent.

The ACA does affect Part B premiums but mainly for upper-income seniors. Single beneficiaries earning more than $85,000 pay higher premiums. The new law doesn’t increase their premiums, but it ensures that more upper-income seniors will pay those higher premiums. The ACA freezes the income brackets at 2010 levels through 2019 rather than allowing it to rise with inflation.

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