House Acts to Prevent Medicare Premium Hike

The House legislation eliminates any premium increases next year for Medicare Part B, which covers doctor’s visits. Even though the majority of Medicare beneficiaries are already exempt from premium increases when there’s no increase in Social Security payments, without Congressional action several million persons would face premium increases of from $8 to $23 per month.

House passage of the bill is a victory for AARP, which has pushed hard to prevent premium increases.

“AARP certainly applauds House passage of this legislation, especially since Medicare premiums have doubled since 2000, and since people in Medicare are now spending nearly one-third of their income on health care,” said Diana D. Hatch, state president of AARP North Carolina. “Since there’s no cost-of-living (COLA) increase in Social Security this year, keeping Medicare premiums from increasing next year is a big help, even as other health care costs continue spiraling upward.”

Nearly 1.4 million North Carolina residents – or 15% of the state’s population – are enrolled in Medicare.

While overall inflation is low (or negative), medical costs continue to rise.

Between August 2008 and August 2009 the cost of medical care rose by 3 percent, even as all goods and services other than medical care fell by 1.8 percent.

Seniors who have seen retirement savings diminish dramatically are particularly hard-hit by rising health care costs. While the economy is recovering, household net worth is still about 17 percent lower than it was at the end of 2007 (and nearly 20 percent lower in inflation-adjusted terms).

Social Security claims are on the rise as the souring employment market forces older Americans out of the workforce and diminishes their personal savings. The number of applications for retirement benefits was nearly 9 percent greater than expected this fiscal year to date.

Written by Bob Garner
Communication Director
AARP North Carolina