Just last week, the Bipartisan Budget Act of 2015 was passed. One of the many provisions of this bill has stopped what would have been a devastating increase in the Medicare Part B premium (physician services), which is currently $104.90 per month.

The good news: There will be no new Medicare premium spike in 2016 for the roughly 36 million people who are currently receiving a monthly Social Security check.

The bad news: There will be no cost of living raise for those receiving Social Security, as the economy indexes used to figure inflation actually declined over the last year. This leaves Social Security recipients without a raise for 2016.

If You Receive A Monthly Social Security Check Now:

You are protected by a hold harmless provision which ensures that your monthly Social Security check will not be reduced when there is an increase in Medicare Part B premiums IF an increase in premium would DECREASE your monthly check amount.

For 2016, as there is no raise in your Social Security check; your Medicare Part B premium will remain $104.90.

Who Will Pay More in 2016?

For the 16 million beneficiaries who are not protected by the hold harmless clause, the new Medicare Part B premium for 2016 will go from $104.90 to 120.70 per month. Without last week’s budget deal, this amount was slated to increase to a whopping $159.30 – a 52% increase!

These beneficiaries include: High income earners (who are paying even more than the current stated premium; as their contribution is calculated according to their income bracket); new enrollees; Medicare beneficiaries who are also enrolled in Medicaid (as the state Medicaid programs pay their Part B premiums); those who are on Medicare but have not elected to take their Social Security payments yet; and those who never qualified for Social Security (Mostly civil servants.).

End Of the Story?

Not likely. The increase in Medicare Part B premiums is based on the fact that healthcare spending is increasing rapidly; as are the numbers of folks aging into Medicare. The Medicare Trust Fund is always running in crisis mode; as there have been no real, long-term solutions that would allow it to keep up with the spending.

Industry experts are quick to point out that this is merely another short-term budget maneuver, and Medicare beneficiaries will continue to feel the symptoms of a Medicare program needing immediate and significant reform.