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With Social Security benefits flat, pressure's on to avert Medicare premium hike

Portion of beneficiaries set to face 52 percent rate increase

Social Security benefits will not see a cost-of-living increase next year, which ratchets up pressure on the government to prevent a sharp spike in premiums for about 30 percent of Medicare beneficiaries.

There will be no cost-of-living increase in 2016 because there was no increase in the consumer price index from the third quarter of 2014 to the third quarter of 2015, according to the Social Security Administration.

This means a provision known as "hold harmless" will shield about 70 percent of Medicare beneficiaries from a rise in premiums, leaving the 30 percent of remaining beneficiaries to shoulder the 52 percent expected rate hike. The latter portion of beneficiaries include individuals with high incomes, new enrollees, those dually eligible for Medicare and Medicaid, and those who do not have their Part B premiums deducted from their Social Security payments.

And if the Medicare premium hikes do occur, state Medicaid agencies will likely be on the hook for millions more in new costs, FierceHealthPayer has reported.

Lawmakers from both parties and the White House have expressed concern about the looming rate hike, with the Obama administration reportedly considering setting up a Medicare contingency fund to lessen the premium increase.

In Congress, the main sticking point is how to pay for the roughly $7.5 billion it would take to prevent the premium hikes. As Sen. Orrin Hatch (R-Utah) tells the New York Times, his party believes any solution must be fiscally responsible. What's more, the fact that House Speaker John Boehner (R-Ohio) is poised to step down--without a clear successor--makes it difficult for Congress to act on this or any other measure.

And Medicare funding is not the only federal spending issue on tap, as the government will run up against the debt ceiling in early November and highway spending expires at the end of October, USA Today reports. A Paul Van de Water, of the Center on Budget and Policy Priorities, tells the publication, "this is now just one more item to add to that list."

To learn more:
- here's the SSA fact sheet
- read the New York Times article
- here's the USA Today article

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