Last week, a two-year budget deal passed through both the U.S. Senate and House of Representatives. As anticipated, on Monday, Nov. 2, the Bipartisan Budget Act of 2015 (H.R. 1314) was signed into law by President Barack Obama. The budget raises the nation’s debt ceiling, protecting the country against a potential default. As an integral part of the agreement, the deal includes multiple key health care provisions.
The budget deal will lower scheduled premium increases to Medicare. Starting in January 2016, approximately 30% of Medicare beneficiaries will pay an increased premium of $120 – nearly $40 less than former estimations. Additionally, the annual deductible will also rise to $167 for all beneficiaries, rather than the $223 deductible that was projected to take place without the budget deal.
To offset the projected premium increases, the U.S. Department of the Treasury will provide a loan to Medicare Part B, which covers doctors’ services, outpatient hospital services and some home health care. To repay the loan from the Treasury, starting in 2016 Medicare beneficiaries will pay $3 a month more in premiums until 2021. Individuals with high incomes will see slightly higher surcharges.
The budget agreement also extends the two-percentage-point reduction in Medicare payments to physicians and hospitals– brought upon by the sequester– which will fund an estimated $25.8 billion of the budget deal.
With a new budget signed by the President, Congress will now look to prevent a potential government shutdown, as a stop-gap spending bill is set to expire on Dec. 11, 2015.