Elders Worry About Today and Tomorrow
Brassieres and Elder Women

Medicare Part B Premium for 2012

category_bug_journal2.gif You may have heard the "big" Medicare news from the Department of Health and Human Services last week: the 2012 premium for Part B coverage – which pays for physician visits, outpatient hospital, certain home health and some other services - will not increase as much as anticipated for the majority of Medicare beneficiaries.

Most elders have been paying $96.40 during the years 2009-2011 in which there have been no Social Security cost-of-living increases. Now that there is a COLA of 3.6 percent for 2012, the Part B premium will rise by $3.50 to $99.90. This amount is deducted each month from Social Security payments.

However, some Medicare beneficiaries will see a real decrease in their Part B premium. If you turned 65 and joined traditional Medicare during the years with no Social Security COLA increases, you have been paying $115.40 for Part B.

That's because Part B premiums did increase during the no-COLA years and new enrollees have paid the higher premium. But the "hold harmless" clause of the Medicare legislation kept the premium at the lower amount for longer-term Medicare recipients so their Social Security payments would not be reduced.

Therefore, if you have been paying $115.40 for Part B, your monthly premium will decrease by $15.50 to $99.90 thereby increasing your Social Security check by that amount in addition to your 3.6 percent COLA. That's a help.

Certainly this reduction (even though it is actually a $3.50 increase for most Medicare beneficiaries) has not gone unnoticed by the Congressional supercommittee that is currently at work deciding what in the federal budget to slash by several trillion dollars.

It is an ideal excuse, from the Republican point of view, to meet the demands of lobbyists for the business/banker/Wall Street one-percenter crowd who have the committee's collective ear to slash Medicare and Social Security benefits, don't you think.

Okay, I'm being cynically snarky, but probably not far off the mark of what's happening behind those closed supercommittee doors.

Leaving that aside for the moment and getting back to the 2012 changes...

The above numbers apply to the majority of traditional Medicare recipients (none of this applies to Medicare Advantage participants) - those whose annual income is $85,000 or less for a single person or $170,000 or less for those filing joint income tax returns.

Part B premiums are means tested (the more polite phrase for this is "income adjusted") so above those two lowest income levels, there are several more, the highest being joint-return couples with income at or above $428,000 who pay $319.70 a month for Part B.

The Part B deductible for 2012 will be $140, a drop of $22 and note this from the Centers For Medicare and Medicaid Services (CMS) about the prescription drug premium:

"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."

Whoopee! Another 76 cents a month in our pockets. Except that in my case, the Part D premium has increased – only by about a dollar a month but it is still an increase, not a reduction.

You will find all this information together with the income adjusted premiums and other information at the CMS website.

So overall, taking into consideration

• the 3.6 percent COLA
• smaller than expected increase in the Part B premium
• the 76-cent reduction in the Part D premium

the average retiree enrolled in traditional Medicare (about 75 percent of the 65-plus population) whose income is below $85,000 ($170,000 for those filing jointly) will see a monthly increase in Social Security income of about $53 a month.

While this is better than a poke in the eye, forgive me if I don't rejoice. Can't you hear the Congressional supercommittee gunning for that $53 they are certain to say old people must give up so that sacrifice is shared.

There have and continue to be many leaks from the supercommittee and it's hard to know what is true and what is not. However, in an interview with Politico on Monday, supercommittee co-chair Senator Patty Murray (D-WA) was asked specifically about Social Security:

"Everything is on the table," she said, "and we've made no decisions."

At The Elder Storytelling Place today, Lyn Burnstine: Reunion


If you have signed over your medicare to a HMO you will find they quickly ate up any increase you will see in your S.S. check.

Co-payments increased and benefits were reduced. It pays to compare HMO's now while you have the time.

People enrolled in Medicare Advantage pay the Part B premium.

But Medicare Advantage plans don't involve the Part B deductible which is going down from $162 to $140.

However, Medicare Advantage plans have raised co-pays for just about every service. The co-pay to see a specialist used to be $25 just a few years ago. In 2012 it will be $45 in many plans.

As an insurance agent I hear from people on these plans that they can't afford to go to more than one specialist each month - yet to diagnose a problem, they may be sent to two or more specialists. That can end up costing $120 or more for these visits.

In some markets, people can shop around for a Medicare Advantage plan with lower co-pays, but comparison shopping probably works better in large cities with five or more plans available.

Where I live, Tucson, AZ, 45% of Medicare beneficiaries are enrolled in Medicare Advantage plans - and they're all about the same. So these folks are stuck with rising costs each year.

I wonder how high the co-pays will go and I wonder if the rules in PPACA will hurt or benefit people enrolled in these plans. I read in the Wall Stret Journal that Humana is making lots of money from Medicare Advantage and this year they spent only 80% of their revenues (almost all coming from Medicare) on patient care. In 2014 PPACA will require them to spend 85% on patient care, so you'd think the co-pays might go down.


To save the government any additional expense,I will just send them the Fifty Three Bucks today and get it off my mind.....

Nancy seems to understand the process very well!! Thanks for keeping us in the loop on the details on this.

What is the monthly amount withheld from Social Security for Part B for those in an Advantage Plan???

Is it the same $99.90??

The column does not make this clear (from Ronni's writing):

The above numbers apply to the majority of traditional Medicare recipients (none of this applies to Medicare Advantage participants)

This is intended to be a story about traditional Medicare only, as I generally do not cover private Advantage plans on this blog.

However, Advantage plan members must continue to pay the Part B premium at the same amount they would pay if they joined traditional Medicare.

Now is the time to review your plans because the open enrollment for Medicare prescription drug plans and Medicare Advantage started October 15 and ends December 7. Many people, quite possibly most, would see a savings if they switched plans - The best way to do it is right on the Medicare.gov site, using the link to finding a drug or health plan. Loyalty and Part D plans are not related - everything is subject to change every year.

Thanks, Ronni, for your reply. The column confused me, but I understood you were writing about traditional Medicare. You're absolutely right; there are too many Advantage plans out there!

Nice information! I'm really enjoying reading your blog here, and I'm looking forward to more!

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