Making Medicare Make Sence

Q: What are the 2012 Cost Sharing Amounts for Medicare Part A & Medicare Part B?

A: The 2012 Part B premium for most beneficiaries is $99.90 per month. This is a $3.50 per month increase for most beneficiaries.

However, it is a decrease for those who joined the Medicare program in 2010 and 2011, and were paying higher premiums as a result.

This is because of a law which freezes Part B premiums for those already in the program, when there is no cost-of-living adjustment (COLA) in their Social Security benefits, and the premium is withheld from Social Security payments. This law did not apply to those who joined Medicare since Jan. 1, 2010, so they paid higher premiums, which are now reduced to the $99.90 level.

Note, however, that nearly everyone paying the $3.50 per month increase this year will get a far larger increase in Social Security benefits to offset it, since there is an adjustment for 2012. The average COLA for Social Security benefits for 2012 is about $43 per month.

More good news: the Medicare Part B deductible – the amount beneficiaries pay out of pocket first, before Medicare begins paying for some services – is $140 in 2012. That’s $22 less than it was last year. And the Part A deductible for beneficiaries admitted as a hospital inpatient is up only slightly from last year, to $1,156. That’s an increase of only 2.1%, far lower than previous years, and lower than the general inflation rate. That deductible is the same for an inpatient stay of up to 60 days of Medicare-covered treatment. Daily co-insurance payments for stays longer than 60 days have also increased by 2.1%.

Most people—about 99% — don’t pay a premium for Medicare Part A, since they or their spouses have at least 40 calendar quarters of Medicare-covered employment during their working lifetimes. For those who don’t meet this requirement, the monthly premiums for Part A are the same as they were in 2011.

For beneficiaries in skilled nursing facilities, the daily co-insurance for days 21-100 is now $144.50, an increase of $3 from 2011. Beneficiaries do not pay anything for the first 20 days of skilled nursing facility care. However, to qualify for Medicare coverage, your doctor must certify that you need daily skilled care, like intravenous injections or physical therapy, and your stay follows at least a three-day, medically necessary, inpatient hospital stay for a related illness or injury.

Approximately 4% of the current Medicare population will pay higher Medicare Part B premiums as required in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. The 2003 law stated that beginning in 2007 the Part B premium a beneficiary will pay each month will be based on his or her annual income. This means your Part B premiums are higher in 2012 if the income shown on your 2010 tax return is greater than $85,000 for an individual return, or $170,000 for a joint return. If this is the case for you, you will get a special notification about it, along with information about how to pay, and how to appeal if you think you shouldn’t have to pay the higher premiums.

However, the news is really good for the majority of Medicare beneficiaries. You will be better off, overall, with the decrease in the Medicare Part B deductible, the cost-of-living increase in your Social Security check, and only slight increases in Part A deductibles and Part B premiums. Also, with new tools provided by the Affordable Care Act, the Centers for Medicare & Medicaid Services, the federal agency that administers these programs, is improving how we pay providers, helping patients get the care they need and spending our health care dollars more wisely.

Q: Can You Explain the Email that Falsely Claims the Medicare Part B Premium will be $247 in 2014?

A: Recently, there has been an email circulating to the general public that falsely claims that the Medicare Part B premium will increase to $247 in 2014 as a result of the Affordable Care Act (ACA).

Medicare Part B premiums are calculated each year based on health care costs the previous year. Since Medicare calculates the premiums each year based on factors that change from year to year, the e-mail’s claim to know what Medicare premiums will be in the future cannot be true. The formula used to calculate the Medicare Part B premium was established by Congress years ago, and for most Medicare beneficiaries, Medicare will pay 75% of the calculated premium, while Medicare beneficiaries will be responsible for 25%. Health Care Reform formally known as the Patient Protection and Affordable Care Act didn’t make changes to the way that the Medicare Part B premium is calculated each year. The recent health care law leaves in place the long-established methods for calculating Medicare Part B premiums.

However, one of the potential effects of the Affordable Care Act may be to slow the growth rate of these premiums over time. The new healthcare law intends to decrease fraud, waste and abuse, and drive down health care costs through delivery system reforms, such as preventing unnecessary hospital readmissions, and an increased emphasis on prevention and effective treatments. Because the Part B premium is calculated based on health care costs, a decrease in the growth rate of these overall expenses will result in a similar slower growth rate for Part B premium costs.

If you have a question about Medicare, call 1-800-MEDICARE, which is, 1-800-633-4227. Medicare’s national toll-free helpline is available 24 hours a day, seven days a week, or visit http://www.medicare.gov or log onto http://www.healthcare.gov to read more about the Affordable Care Act.