Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
Social Security COLA Could Be As Much As 2% In 2018
Don't need to read that to know the contents. Existing SS recipients were getting a free ride by not paying their share of increased Medicare costs. That placed the burden on a much smaller pool of people (30%) - those just starting Medicare and those paying IRMAA (premium surcharges due to high income).
Congress put in a patch in 2015, so that those others would only pay their fair share in 2016 (and not the additional amount needed because 70% of Medicare participants weren't paying their share of the increased cost). That government largesse is being slowly recaptured over time with slightly elevated premiums.
Since most Medicare recipients were paying less than their fair share (so that their net SS checks wouldn't go down), any increase in SS payments will go toward Medicare premiums until the recipients catch up to their fair share premiums.
If everyone (except those paying an IRMAA surcharge) paid the same amount, then in 2016 everyone would have paid $118.80. But because 70% of the Medicare participants' premiums were frozen at $104.90, the remaining 30% would have had to have paid $159.30 to make up the difference.
That $118.80 is what I called the fair share. It's what everyone would have paid had the law not given the 70% a loophole. Because of Congressional action, the remaining 30% had to pay just their fair share ($118.80) plus a small $3 surcharge that would go toward recapturing the subsidy they were getting. (Without the subsidy, the 30% would have had to have paid more than their fair share.)
(All data from Figure 1 in the KFF cite.)
Dividing the cost of Medicare evenly among all participants (except those high earners who are charged an IRMAA surcharge) seems fair to me. Could you explain how that strikes you as skewed?
Well, no, I don't want to go into it in detail. You see, the color of the sky on the planet I came from is completely different. The assumptions I bring to the table are ALWAYS quite different from almost everyone else's. It's all a lot more complicated than it needs to be. I'm still 2 years from Medicare, just started SS. Do most people pay for their Medicare via automatic deductions from their monthly SS? Is that a federal requirement? Why not simply remove the cap on SS altogether? That seems lots more like a fair share to me. Would the wealthy pay a lot more into SS? Yes. Are they already paying lots more into SS than most? Yes. So what? If the cap were removed, no one thinks that the wealthy would be left to choose to pay for EITHER food or prescriptions, eh?
@Crash: "Do most people pay for their Medicare via automatic deductions from their monthly SS? Is that a federal requirement?" If you receive Social Security or Railroad Retirement, yes, otherwise you pay quarterly. Regards, Ted
@Ted Current Medicare subscribers I know, who have not yet started SS; pay monthly via an ACH withdrawal or monthly paper check. Perhaps there are other options, but I don't recall quarterly payments being one.
I've seen quarterly bills sent to Medicare participants. I believe that if you are paying higher IRMAA rates, the bills switch to monthly.
But even monthly, it seems that Medicare is happy to accept quarterly payments in advance. The only virtue I see in this is that you might save the price of a postage stamp.
Comments
Regards,
Ted
"Social Security Giveth, And Medicare Could Taketh Away"
http://www.saukvalley.com/2017/10/08/social-security-giveth-and-medicare-could-taketh-away/a7aw7d3/
Congress put in a patch in 2015, so that those others would only pay their fair share in 2016 (and not the additional amount needed because 70% of Medicare participants weren't paying their share of the increased cost). That government largesse is being slowly recaptured over time with slightly elevated premiums.
https://www.kff.org/medicare/issue-brief/whats-in-store-for-medicares-part-b-premiums-and-deductible-in-2016-and-why/
Since most Medicare recipients were paying less than their fair share (so that their net SS checks wouldn't go down), any increase in SS payments will go toward Medicare premiums until the recipients catch up to their fair share premiums.
That $118.80 is what I called the fair share. It's what everyone would have paid had the law not given the 70% a loophole. Because of Congressional action, the remaining 30% had to pay just their fair share ($118.80) plus a small $3 surcharge that would go toward recapturing the subsidy they were getting. (Without the subsidy, the 30% would have had to have paid more than their fair share.)
(All data from Figure 1 in the KFF cite.)
Dividing the cost of Medicare evenly among all participants (except those high earners who are charged an IRMAA surcharge) seems fair to me. Could you explain how that strikes you as skewed?
Regards,
Ted
Current Medicare subscribers I know, who have not yet started SS; pay monthly via an ACH withdrawal or monthly paper check.
Perhaps there are other options, but I don't recall quarterly payments being one.
But even monthly, it seems that Medicare is happy to accept quarterly payments in advance. The only virtue I see in this is that you might save the price of a postage stamp.