You may have heard the terms: Part B giveback, reduction or rebate. Do you know what that means or how it works for your clients?
The give-back benefit is another term for Part B premium reduction. This is when a Medicare Advantage plan reduces the amount your client pays towards their Part B monthly premium. These givebacks are offered by some Medicare Advantage plans and are designed to make plans even MORE affordable. The amount of the givebacks can range depending upon the plan and location. They can be as low as $20 and some plans offer more than $100 in giveback rebates.
How it Works:
If a beneficiary is on Social Security, the Part B premium comes out of their monthly benefit before it hits their bank account OR it's reflected in their monthly check. The giveback reduces their Part B premium, which means more money ends up in the individual’s bank account.
If your client pays their Part B premium directly (not by automatic Social Security check deduction), their Part B premium statement will be updated with the giveback amount credited to what they owe. The standard Part B premium for 2021 is $148.50. This amount changes yearly and is based on income. Learn more.
If a beneficiary's monthly Social Security check is normally $1600 and their giveback is $100, their Social Security benefit will now be $1700. If they pay the standard Part B premium ($148.50) the amount they will owe after receiving the giveback will be $48.50.
Part B givebacks can offer Medicare beneficiaries yet another way to save money by choosing a Medicare Advantage plan.
To be eligible for this program your client must be responsible for paying their own Part B premium, which means they are NOT eligible to receive Medicaid or participate in a Medicare Savings Plan.
As always, it's important to make sure the Medicare Advantage plan fits your client's needs and budget. It's also crucial to make sure it includes access to the doctors and hospitals they need, as well as making sure their prescription drugs are on the plan’s formulary.
CMS has announced that Part B premiums will rise in 2017. 70% of Medicare beneficiaries will have their premiums increase from ~$105/month to $110/month. However, the remaining 30% will face a 10% increase in their base premiums. The 6% of beneficiaries who pay a high income surcharge will pay an additional 10% increase in that surcharge, on top of their Part B premiums.
All Social Security recipients will receive a 0.3% cost of living increase for 2017. A meager increase to say the least, but better than getting nothing at all, which was the case in 2016.
70% of recipients fall under a hold harmless provision implemented back in 1987 which is designed to keep their net checks from diminishing. So for those retirees who have their Part B premiums deducted from their Social Security checks, the premium cannot go up in any given year by more than the extra dollars that they're receiving as a cost of living adjustment.
The remaining 30%, who are well off and who don't have their premiums withheld from their SS checks, are the unlucky recipients of the rising costs that are deflected from those that fall under the hold harmless provision.
The numbers sound abysmal, but in light of what could have happened, they're not nearly as exorbitant as they could have been. Last year Congress voted to keep the increase to 16% for the 30% who pay the surcharge (rather than the proposed 52%). Next year's increase was proposed to be 22% which Congress has knocked back to 10%.
The costs are staggering, and the issue isn't going to resolve itself anytime soon as seniors continue to live longer, and the cost of care continues to climb.
By Carolyn Portanova
Carolyn Portanova is the Director of Marketing at The Brokerage Resource and has been with the firm since 2012.