Ever changing economic conditions raise concerns for Medicare. Under the current conditions,can we accurately predict Medicare premiums 2014?
The internet search engines boast a large debate of how much seniors will pay for Medicare premiums 2014. Some tell of huge rises in premiums while others site an overall decline. Understanding Medicare program funding, allows one to understand why premiums rise.
Medicare beneficiaries as a whole, pay for 25% of the required cost to run the Medicare program year to year. The federal government pays 75% of the remaining costs. These costs are obtained through employee benefits and federal taxes. The standard premium amounts are calculated from the programs’ cost the year previous. Medicare tracks its yearly premium trends. Its most recent report published in May 2011.
The Board of Trustees, Federal Hospital Insurance and Federal Supplementary Medical Insurance Board’s report projects Medicare premiums to rise over the next few years. Medicare premiums 2014 is projected to $115.80 for Medicare Part B. It is important to remember these are projected figures. Medicare continues to grow as a program with more beneficiary demand yearly. Annual growth over the last 5 years for Medicare Part B & D was 6.9%. According to the May 2011 report, figures expected to keep pace despite the decline in jobs and the economy.
The Affordable Care Act in many ways enhances benefits for the beneficiary. One downside to such enhancements is the predicted decline of patients from private Medicare insurance. It is estimated 40% by 2020, will drop private insurance to return to the federal program. Steady population growth combined with lower employer contribution places a bigger demand on the Medicare budget. This is similar to a family budget that feeds six, now demanded to feed 8.5 people that continues to grow at each meal.
The Federal government is trying to balance an increase output with a decreasing input on the vital Medicare program. Many economic variables determine the cost of Medicare premiums year to year. The current laws and predictions show Medicare premiums 2014 will increase.