Medicare Announces Premiums for 2012, Part B Increase Just $3.50 Monthly for Most
Most senior citizens will see an increase in Social Security of about $43 in 2012, producing a gain after Part B cost of
39.50 per month
Oct. 27, 2011 – The wait is over. Medicare announced the premiums and deductibles senior citizens will be paying in 2011,
which included the increase for the most expensive premium seniors pay, Part B, which many feared would wipe out the cost-of-living increase
in Social Security. The news is good, at least for most seniors, the increase in Part B will be just $3.50, which barely touches the $43 COLA
increase for the average senior.
The standard Medicare Part B monthly premium will be $99.90 in 2012, a $15.50 decrease over the 2011 premium of $115.40.
However, most Medicare beneficiaries were held harmless in 2011 and saw no increase in the Part B premium, because there was no Social
Security COLA increase, which kept their rate at $96.40 per month. The 2012 premium represents a $3.50 increase for these beneficiaries.
The net gain for most seniors, after deducting the $3.50 Part B premium from the $43 COLA will be about $39.50.
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This story gives a detail explanation of Part B and its cost:
Social Security
isn't responsible for federal deficit - just the opposite. Until last
year it took in more than it paid out. It lent
the surpluses to the government
By Robert Reich,
former Secretary of Labor - Feb. 26, 2011
“At $99.90 per month, the standard premium leaves the Medicare program and its beneficiaries on strong footing for the
coming year,” said Joe Baker, President of the Medicare Rights Center, an advocacy
group.
“The payment reforms enacted over the past few years, including those in the Affordable Care Act (ACA), in addition to
crackdowns on fraud, waste and abuse, are partially responsible for the increased optimism about Medicare’s financial health, the
lower-than-predicted Part B premium, and an almost unheard-of drop in the Part B deductible.”
Most of the other premiums and deductibles for other Medicare products had modest increases are went down.
Medicare, however, is not a one-glove-fits-all program. It has become increasingly complicated for seniors to know
exactly how the premiums and deductibles affect them, since a number of variables are now used to determine individual costs.
The most significant of these has been the addition of high fees for seniors with the highest incomes.
To help each senior determine had the 2012 rates will impact them, SeniorJournal.com is publishing the complete
information released by Medicare today to explain the changes. First is the news release, followed by the fact sheet, which contains all the
details.
News Release from Health and Humans Services
Medicare Part B premiums for 2012 lower than projected
Affordable Care Act helps keep Medicare affordable
The U.S. Department of Health and Human Services (HHS) announced that Medicare Part B premiums in 2012 will be lower than
previously projected and the Part B deductible will decrease by $22. While the Medicare Trustees predicted monthly premiums would be $106.60,
premiums will instead be $99.90. Earlier this year, HHS announced that average Medicare Advantage premiums would decrease by four percent and
premiums paid for Medicare’s prescription drug plans would remain virtually unchanged.
Thanks to the Affordable Care Act, people with Medicare also receive free preventive services and a 50 percent discount
on covered prescription drugs when they enter the prescription drug “donut hole.” This year, 1.8 million people with Medicare have received
cheaper prescription drugs, while nearly 20.5 million Medicare beneficiaries have received a free Annual Wellness Visit or other free
preventive services like cancer screenings.
“The Affordable Care Act is helping to keep Medicare strong and affordable,” said HHS Secretary Kathleen Sebelius.
“People with Medicare are seeing higher quality benefits, better health care choices, and lower costs. Health reform is also strengthening the
Medicare Hospital Insurance Trust Fund and cracking down on Medicare fraud.”
Medicare Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical
equipment, and other items. In 2012, the “standard” Medicare Part B premium will be $99.90. This is a $15.50 decrease over the standard 2011
premium of $115.40 paid by new enrollees and higher income Medicare beneficiaries and by Medicaid on behalf of low-income enrollees.
The majority of people with Medicare have paid $96.40 per month for Part B since 2008, due to a law that freezes Part B
premiums in years where beneficiaries do not receive cost-of-living (COLA) increases in their Social Security checks. In 2012, these people
with Medicare will pay the standard Part B premium of $99.90, amounting to a monthly change of $3.50 for most people with Medicare. This
increase will be offset for almost all seniors and people with disabilities by the additional income they will receive thanks to the Social
Security cost-of-living adjustment (COLA). For example, the average COLA for retired workers will be about $43 a month, which is substantially
greater than the $3.50 premium increase for affected beneficiaries. Additionally, the Medicare Part B deductible will be $140, a decrease of
$22 from 2011.
What the Media Is Reporting
Medicare Part B 2012 Premiums Lower Than Projected
Oct. 27, 2011 - The Obama administration today announced that premiums for Medicare Part B
coverage in 2012 will be $99.90 a month for most beneficiaries, a smaller-than-expected increase over the $96.40 paid this year by a
majority of elderly and disabled beneficiaries. Part B pays for physician visits, hospital outpatient costs and certain other
services. A 3.6 percent Social Security cost-of-living adjustment, the first in three years, will more than make up for the small
increase, according to the Department of Health and Human Services.
The Associated Press: "Medicare's basic monthly premium will rise significantly less
than expected next year, the government announced Thursday. That could pay political dividends for President Barack Obama and for
Democrats struggling to win over seniors in a close election" (Alonso-Zaldivar, 10/27).
Bloomberg Businessweek: "About 45 million retired and disabled people will pay
lower-than-projected Medicare premiums for doctor visits and other outpatient services next year, the U.S. said" (Eisenberg, 10/27).
Politico Pro: "Medicare Part B premiums will be about $7 less per month than originally
projected for 2012, HHS officials announced Thursday. The Part B deductible will also decline by $22. ... This announcement follows
news in September that Medicare Advantage premiums will fall an average of 4 percent in 2012, while premiums for the Part D
prescription drug program will essentially hold steady at their 2011 levels" (Feder, 10/27).
Forbes: "[B]etter off seniors who pay additional income-based premiums for Part B,
which covers doctors and out-patient services, will actually see those monthly premiums fall. For example, a single senior with an
adjusted gross income between $85,000 and $107,000 will pay a total monthly Part B premium of $139.90 in 2012, down from $161.50 this
year. A couple with an AGI of more than $428,000, who are both on Medicare, will pay total Part B premiums for both of them of $639.40
a month, down from $738.20— a 13% drop" (Novack, 10/27).
The Hill: "CMS administrator Donald Berwick said the lower-than-expected premium hike
was due to two principal factors: historically low healthcare utilization rates, due in part to the health reform law's investment in
prevention; and the 3.6 percent Social Security cost-of-living hike announced earlier this month.Due to the COLA adjustment, seniors
won't be held harmless for Medicare premium increases as they have in recent years. As a result, the increase is lower and more evenly
spread out than initially projected" (Pecquet, 10/27).
USA Today: "In a statement accompanying release of the Medicare premiums, Health and
Human Services Secretary Kathleen Sebelius said seniors have nothing to fear from the new health care law. 'The Affordable Care Act is
helping to keep Medicare strong and affordable,' she said. ... A leading nonpartisan expert on Medicare said she doubted election-year
politics are behind the lower-than-expected premiums for 2012. 'Changes in premiums are obviously important to seniors but the numbers
are based on what the law requires, and determined by independent actuaries, rather than politics,' said Tricia Neuman of the Kaiser
Family Foundation" (10/27).
This is part of Kaiser Health News' Daily Report - a summary of health policy coverage from
more than 300 news organizations. The full summary of the day's news can be found
here and you can sign up for e-mail subscriptions to the Daily Report
here. In addition, our staff of reporters and correspondents file original stories each
day, which you can find on our
home page.
“Thanks in part to the Affordable Care Act, people with Medicare are going to have more money in their pockets next
year,” said Centers for Medicare & Medicaid Services (CMS) Administrator Donald Berwick, M.D. “With new tools provided by the Affordable Care
Act, we are improving how we pay providers, helping patients get the care they need, and spending our health care dollars more wisely.”
Today, CMS also announced modest increases in Medicare Part A monthly premiums as well as the deductible under Part A.
Monthly premiums for Medicare Part A, which pays for inpatient hospitals, skilled nursing facilities, and some home health care, are paid by
just the 1 percent of beneficiaries who do not otherwise qualify for Medicare. Medicare Part A monthly premiums will be $451 for 2012, an
increase of $1 from 2011. The Part A deductible paid by beneficiaries when admitted as a hospital inpatient will be $1,156 in 2012, an
increase of $24 from this year's $1,132 deductible. These changes are well below increases in previous years and general inflation.
Fact Sheet by Centers for Medicare and Medicaid Services
MEDICARE PREMIUMS AND DEDUCTIBLES FOR 2012
MEDICARE PART A:
Medicare Part A premiums will be increasing by just $1 per month, and the deductible will increase by just $24. For
Medicare Part A, which pays for inpatient hospital, skilled nursing facility, and some home health care, about 99 percent of Medicare
beneficiaries do not pay a premium since they or their spouses have at least 40 quarters of Medicare-covered employment.
However, some enrollees age 65 and over and certain persons with disabilities who have fewer than 30 “quarters of
coverage” obtain Part A coverage by paying a monthly premium set according to a statutory formula. This premium will be $451 for 2012, an
increase of $1 from 2011.
Those who have between 30 and 39 “quarters of coverage” may buy into Part A at a reduced monthly premium rate which is
$248 for 2012, the same amount as in 2011. The Part A deductible paid by a beneficiary when admitted as a hospital inpatient will be $1,156 in
2011, an increase of $24 from this year's $1,132 deductible.
The Part A deductible is the beneficiary's cost for up to 60 days of Medicare-covered inpatient hospital care in a
benefit period. Beneficiaries must pay an additional $289 per day for days 61 through 90 in 2012, and $578 per day for hospital stays beyond
the 90th day in a benefit period.
For 2011, per day payment for days 61 through 90 was $283, and $566 for beyond 90 days. For beneficiaries in
skilled nursing facilities, the daily co-insurance for days 21 through 100 in a benefit period will be $144.50 in 2012, compared to $141.50 in
2011.
MEDICARE PART B:
The standard Medicare Part B monthly premium will be $99.90 in 2012, a $15.50 decrease over the 2011 premium of $115.40.
However, most Medicare beneficiaries were held harmless in 2011 and paid $96.40 per month. The 2012 premium represents a $3.50 increase for
them.
Medicare Part B covers a portion of the cost of physicians’ services, outpatient hospital services, certain home health
services, durable medical equipment, and other items. By law, the standard premium is set to cover one-fourth of the average cost of Part B
services incurred by beneficiaries aged 65 and over, plus a contingency margin.
The contingency margin is an amount to ensure that Part B has sufficient assets and income to (i) cover Part B
expenditures during the year, (ii) cover incurred-but-unpaid claims costs at the end of the year, (iii) provide for possible variation between
actual and projected costs, and (iv) amortize any surplus assets.
Most of the remaining Part B costs are financed by Federal general revenues. (In 2012, about $2.9 billion in Part B
expenditures will be financed by the fees on manufacturers and importers of brand-name prescription drugs under the Affordable Care Act.)
The largest factor affecting the contingency margin for 2012 is the current law formula for physician fees, which will
result in a payment reduction of about 29 percent in 2012. For each year from 2003 through 2011, Congress has acted to prevent smaller
physician fee reductions from occurring.
The 2012 reduction is almost certain to be overridden by legislation enacted after Part B financing has been set for
2012. In recognition of the strong possibility of increases in Part B expenditures that would result from similar legislation to override the
decrease in physician fees in 2012, it is appropriate to maintain a significantly larger Part B contingency reserve than would otherwise be
necessary. The asset level projected for the end of 2012 is adequate to accommodate this contingency.
In 2012, Social Security monthly payments to enrollees will increase by 3.6 percent. The dollar increase in benefit
checks is expected to be large enough on average to cover the increase in the Part B premium of $3.50 that most beneficiaries will experience.
For those who were paying the standard premium of $115.40, their benefits checks will only increase.
Affordable Care Act gives seniors with Medicare cheaper prescription drugs, free preventive services, and lower costs,
says CMS
Oct. 12, 2011 - With more benefits, better choices and lower costs, the Centers for Medicare & Medicaid Services (CMS) is
encouraging people with Medicare and their families to begin reviewing drug and health plan coverage options for 2012. The Medicare Open
Enrollment Period - which begins earlier this year on Saturday, October 15 – has been expanded to last seven weeks and will end on December 7.
Read more...
MEDICARE PART D:
The estimate for the average 2012 Part D premium for basic coverage is $30. This is slightly lower than the actual
average for 2011 of $30.76. The estimate for the average 2012 Part D premium for supplemental coverage is $8. The estimate for the average
2012 total Part D premium is $38.
MEDICARE ADVANTAGE PLANS:
On average, Medicare Advantage premiums will be 4 percent lower in 2012 than in 2011, and plans project enrollment to
increase by 10 percent. Of people with Medicare, 99.7 percent continue to enjoy access to a Medicare Advantage plan, and benefits remain
consistent with those offered in 2011.
INCOME RELATED ADJUSTMENT:
As required in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, beginning in 2007 the Part B
premium a beneficiary pays each month is based on his or her annual income. Specifically, if a beneficiary’s “modified adjusted gross income”
is greater than the legislated threshold amounts ($85,000 in 2012 for a beneficiary filing an individual income tax return or married and
filing a separate return, and $170,000 for a beneficiary filing a joint tax return) the beneficiary is responsible for a larger portion of the
estimated total cost of Part B benefit coverage.
In addition to the standard Part B premium, affected beneficiaries must pay an income-related monthly adjustment amount.
These income-related amounts were phased-in over three years, beginning in 2007. About 4 percent of current Part B enrollees are expected to
be subject to these higher premium amounts.
The 2012 Part B monthly premium rates to be paid by beneficiaries who file an individual tax return (including those who
are single, head of household, qualifying widow(er) with dependent child, or married filing separately who lived apart from their spouse for
the entire taxable year), or who file a joint tax return are shown in the following table:
Beneficiaries
who file an individual tax return with income:
Beneficiaries
who file a joint tax return with income:
Part B income-related monthly adjustment amount
Total monthly Part B premium amount
Less than or equal
to $85,000
Less than or equal
to $170,000
$0.00
$99.90
Greater than
$85,000 and less than or equal to $107,000
Greater than
$170,000 and less than or equal to $214,000
$40.00
$139.90
Greater than
$107,000 and less than or equal to $160,000
Greater than
$214,000 and less than or equal to $320,000
$99.90
$199.80
Greater than
$160,000 and less than or equal to $214,000
Greater than
$320,000 and less than or equal to $428,000
$159.80
$259.70
Greater than
$214,000
Greater than
$428,000
$219.80
$319.70
In addition, the monthly premium rates to be paid by beneficiaries who are married, but file a separate return from their
spouse and lived with their spouse at any time during the taxable year are as follows:
Beneficiaries
who are married but file a separate tax return from their spouse:
Part B income-related monthly adjustment amount
Total monthly Part B premium amount
Less than or equal
to $85,000
$0.00
$99.90
Greater than
$85,000 and less than or equal to $129,000
$159.80
$259.70
Greater than
$129,000
$219.80
$319.70
As a result of the Medicare Modernization Act, the Part B deductible was increased to $110 in 2005 and is indexed
thereafter by the annual percentage increase in the Part B actuarial rate for aged beneficiaries. In 2012, the Part B deductible will be $140,
a decrease of $22 from 2011. (The actuarial rate is set by law at one-half of the total estimated per-enrollee cost of Part B benefits and
administrative expenses, adjusted as necessary to maintain an adequate contingency reserve.)
Those who enroll in Medicare Advantage plans may have different cost-sharing arrangements. On average Medicare Advantage
premiums will be 4 percent lower in 2012 than in 2011, and plans project enrollment will increase.
Beginning in 2011, the Affordable Care Act required Part D enrollees whose incomes exceed the same thresholds that apply
to Part B enrollees to pay an income-related monthly adjustment amount, in addition to their Part D plan premium. The 2012 income-related
monthly adjustment amounts to be paid by beneficiaries who file an individual tax return (including those who are single, head of household,
qualifying widow(er) with dependent child, or married filing separately who lived apart from their spouse for the entire taxable year), or who
file a joint tax return are shown in the following table:
Beneficiaries who file an individual tax return with income:
Beneficiaries who file a joint tax return with income:
Income-related monthly adjustment amount
Less than or equal to $85,000
Less than or equal to $170,000
$0.00
Greater than $85,000 and less than or equal to $107,000
Greater than $170,000 and less than or equal to $214,000
$11.60
Greater than $107,000 and less than or equal to $160,000
Greater than $214,000 and less than or equal to $320,000
$29.90
Greater than $160,000 and less than or equal to $214,000
Greater than $320,000 and less than or equal to $428,000
$48.10
Greater than $214,000
Greater than $428,000
$66.40
In addition, the income-related monthly adjustment amounts to be paid by Part D beneficiaries who are married, but file a separate
return from their spouse and lived with their spouse at any time during the taxable year are as follows:
Beneficiaries who are married and lived with their spouse at any time during the year,
but file a separate tax return from their spouse:
Income-related monthly adjustment amount
Less than or equal to $85,000
$0.00
Greater than $85,000 and less than or equal to $129,000
$48.10
Greater than $129,000
$66.40
As noted above, states have programs that pay some or all of beneficiaries' Part A and Part B
premiums and coinsurance for certain people who have Medicare and a limited income. Medicare provides similar assistance with premiums and
cost-sharing for low-income Part D enrollees. Information is available at 1-800-MEDICARE (1-800-633-4227) and, for hearing and speech
impaired, at TTY/TDD: 1-877-486-2048.
Keep up with the latest news for senior citizens, baby
boomers
Most senior citizens will see an increase in Social Security of about $43 in 2012, producing a gain after Part B cost of
39.50 per month
- What will it mean to you?
Cost-of-Living Adjustment is First Since 2009; see details, questions answered by Social Security
- Oct. 19, 2011
