Medicare Part B Deductible and Premiums

Medicare Part B premiums up _ but not as much as expected

The Associated Press

7:16 a.m. Friday, October 28, 2011


WASHINGTON — Good news for seniors: The government says Medicare’s basic monthly premium will rise less than expected next year, by $3.50 for most.

It could be good, too, for President Barack Obama and Democrats struggling for older Americans’ votes in a close election.

At $99.90 per month, the 2012 Medicare Part B premium for outpatient care will be about $7 less than projected as recently as May. The additional money that most seniors will pay works out to about 10 percent of the average Social Security cost-of-living increase they’ll also be due.

Some recently enrolled younger retirees will actually pay less. They were charged $115.40 a month this year, and they’ll see that go down to $99.90.

The main reason for lower-than-expected premiums seems to be the connection between Social Security COLAs and Medicare. Some also cite a moderation in health care costs.

But the Obama administration is hoping seniors will get a simpler takeaway message: Medicare is under sound management.

Older voters went for Republicans in the 2010 elections, after Obama’s health care overhaul law cut Medicare spending to help finance coverage for the uninsured. Since then, the administration has worked hard to reverse any perception that Obama is steering Medicare into decline.

Health and Human Services Secretary Kathleen Sebelius said it’s “pretty remarkable” that premiums will stay in check. She reassured seniors that they have nothing to fear from the health care law.

“Thanks to the Affordable Care Act, Medicare is providing better benefits at lower cost,” said Sebelius.

Republicans weren’t buying it.

A spokeswoman for Sen. Orrin Hatch of Utah said the brunt of the health law’s Medicare cuts are still to come. “More importantly,” added Antonia Ferrier, “lower Medicare premiums are being driven by lower than average Medicare spending due to the slow economy” — not the health care law. Hatch is the ranking Republican on the Senate panel overseeing Medicare.

A spokeswoman for House Ways and Means Chairman Dave Camp, R-Mich., said premiums are more affordable because seniors on tight budgets are spending less on health care in a troubled economy.

Medicare Part B annual deductible, the amount beneficiaries pay before their coverage begins, will also drop next year to $140, a decrease of $22. The hospital deductible, however, will increase by $24, to $1,156, for those admitted as inpatients. One doesn’t cancel out the other since a minority of beneficiaries are hospitalized in any given year.

AARP, the seniors lobby, reacted warily to Thursday’s announcement. Policy director David Certner said there’s still a chance Congress could cut Medicare and Social Security as part of a budget deal. “These changes would far outweigh today’s good news,” he said.

For the average retiree, the Medicare news means they will have to fork over only a small part of a long-awaited Social Security increase next year for premiums.

Premiums have been frozen at the 2008 level of $96.40 a month for about three-fourths of Medicare beneficiaries. That was due to the lack of a Social Security COLA during the depths of the economic downturn. But Social Security recently announced a raise averaging $39 a month for 2012.

The Medicare Part B premium is one number that most of the 48 million people on Medicare can connect with. Average premiums for prescription coverage and for popular Medicare Advantage plans will stay flat or dip slightly for 2012, but fewer beneficiaries opt for those benefits.

A leading nonpartisan expert on Medicare said she doubted election-year politics were 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.

Neuman said the explanation probably concerns the relationship between Medicare premiums and Social Security cost of living adjustments.

By law, the Medicare Part B premium is set to cover 25 percent of the cost of Medicare’s outpatient care benefit.

But premiums have been frozen for most beneficiaries because federal law also says that an individual’s Medicare premium cannot go up more than his Social Security COLA, with some exceptions.

That left a relatively small share of beneficiaries, including recent enrollees, bearing the brunt of higher Medicare costs. Indeed, the “standard premium” for 2011 rose to $115.40, and new enrollees were charged that amount. Upper-income retirees pay even more, but premiums for the poor are covered by Medicaid.

Back in May, government experts were forecasting a Medicare a premium of $106.60 for 2012. At that time, they were also projecting a Social Security COLA of just 0.7 percent. But the final COLA increase turned out to be much bigger, a 3.6 percent raise. And that meant rising Medicare costs could be spread among many more people, resulting in smaller individual increases.

“More people are sharing the smaller-than-expected increase, so that is spread over a larger number of people,” said Medicare chief Don Berwick. Administration officials say they’ve also seen a slow-down in the use of health care services throughout the economy, not just among seniors.


Associated Press writer Stephen Ohlemacher contributed to this report.


Find this article at:


Georgia Medicare Plans believes this makes GA Medigap rates for plan G even more attractive than ever.

Free No More

The federal government is looking for ways to save tax dollars and one way is to encourage those with ESRD to enter hospice rather than go on dialysis. Congress established this "entitlement" program In 1972 when treatment options for End Stage Renal Disease were limited. According to the New York Times,

dialysis and transplants were new procedures that were not covered by health insurance. There were horrifying stories — rich people got dialysis and lived while poor people died.

A bit of class warfare that decides who lives and who dies.

grim reaper

Now Congress is looking for ways to save money and one way is to encourage those on Medicare to just go ahead and take one for the team.

at that time (1972) fewer than 40 patients per million would need dialysis, and that most of those patients would be healthy — except for their failed kidneys — and under age 54.

Now more than 400 people per million start dialysis each year. More than a third of the patients are 65 or older, and they account for about 42 percent of the costs. People over 75 make up the fastest-growing group of dialysis patients. And most elderly dialysis patients have other serious diseases like diabetes, heart failure, stroke and even advanced dementia. One-third of them have four or more chronic conditions.

Unintended consequences . . .

Recent studies have found that dialysis does not prolong life for many elderly people with other serious chronic illnesses. One study found that the procedure’s main effect is to increase the chances that such patients will die in the hospital rather than at home.

Save tax dollars. Send grandpa home.

A committee of the Renal Physicians Association recently formulated guidelines to use in deciding when dialysis is appropriate. It provides questions that doctors should ask themselves before suggesting the treatment. One is the “surprise” question: Would I be surprised if this patient is dead within a year?

Well that is certainly comforting!

Don't be surprised if Congress doesn't come up with a way to encourage dying over dialysis.

Medicare Hospital Readmissions Under Fire

Medicare is monitoring hospital readmissions and they are not happy. Georgia Seniors on Medicare need to know their rights when they are admitted, and then readmitted to the hospital for the same medical condition.

If Medicare get's their way, hospitals could be held financially responsible for seniors on Medicare that may have been discharged too bedside manner

In an effort to save money and improve care, Medicare, the federal program for the elderly and disabled, is about to release a final rule aimed at getting hospitals to pay more attention to patients after discharge.

A key component of the new approach is to cut back payments to hospitals where high numbers of patients are re-admitted, prodding hospitals to make sure patients see their doctors and fill their prescriptions.

Medicare also wants to pay less to hospitals with higher-than-average costs for patient care. It has proposed calculating the costs by combining a patient’s hospital expenses with fees incurred up to 90 days after discharge.

In other words, if Medicare decides you were discharged too early the HOSPITAL, not Medicare, will be responsible for covering the cost of your care.

Medicare states that hospital readmissions cost Medicare about $26 billion over a 10 year period.

Now $26 billion might seem like a lot of money to you and me but Washington loses that much change in the sofa on a weekly basis.

Medicare’s penalties could be significant — and widespread. Almost 7 percent of acute-care hospitals — 307 out of 4,498 — had higher-than-expected re-admission rates for heart failure, heart attack or pneumonia, according to Medicare data. Under Medicare’s draft proposal, which it put out in May, penalties would start in October 2012 and hospitals with the worst re-admission rates eventually could lose up to 3 percent of their regular Medicare payments.

Hospitals with patients who cost Medicare lots of money during and after their hospital stays also could be hurt. Beginning in October 2013, these spending levels would count for a fifth of Medicare’s “value-based purchasing program,” which alters hospital payments based on a long list of quality measures.

This does not look good for Medicare beneficiaries either.

“The incentives we’re putting into place have created a whole new way to think about hospital care,” said Jonathan Blum, deputy administrator of the federal Centers for Medicare and Medicaid Services (CMS).

Absolutely. Consider the following "new ways" to thnk about hospital care.

  • Sorry, you are too sick, we can't admit you.
  • For THAT condition the hospital across the street is a better choice.
  • If we admit you and you return it is going to cost us money. Guido will make sure you never again have any complaints about your condition.
  • You are well enough to go home now so we will just go ahead and pull the plug. The orderly will be around in an hour or so to roll you out.
  • Well, you are not really sick enough to be admitted to the hospital yet.
  • We no longer treat sick patients on Medicare. Come back when you have cash.

OK this might be a stretch but rationed health care wears many faces.

“The more hospitals realize they’re going to be held accountable, that’s where they are going to get creative,” Patel said.

That's a mouthful.

Medicare was never designed to cover all the cost of a hospital stay. The current Medicare Part A deductible is $1132 per admission for the first 60 days. If the hospital is not found liable for an early discharge, who pays?

Or if the hospital appeals the charge that they should be liable for any readmission, who pays until the appeal process is complete?

The answer could be that YOU pay.

How much money do you have in your bank to cover one or more readmissions?

Georgia Medicare supplement plan G will cover the cost of your hospital deductible and much more. GA Medigap quotes allows you to compare mutilple plans side by side to find the best plan and premium for your dollars.

United of Omaha Pulls Plan N

It is now official. United of Omaha will be removing Medicare supplement plan N from their portfolio. Applications submitted prior to April 22, 2011 for plan N will be considered. Applications signed and dated after April 22 or received after May 6, 2011 will be returned.

Paying too much for Medigap? Click here now to compare and find the lowest Medicare supplement rates.

If you currently have a Georgia United of Omaha Medicare supplement plan N you should consider swapping if for a new plan with another carrier. Since United of Omaha is closing this block to new entrants the next step will be to issue significantly higher rate increases until the block stabilizes or disintegrates. 

If you are healthy and can pass underwriting, we have several options with other carriers that have low premiums.

If you opted for United of Omaha plan N because of their willingness to take anyone regardless of health, we still have an option.

Ask us for a competitive quote and comparison now on a Georgia Medicare supplement plan.

No COLA For Social Security

WASHINGTON (AP) — Millions of retired and disabled people in the United States had better brace for another year with no increase in Social Security payments.

The government is projecting a slight cost-of-living adjustment for Social Security benefits next year, the first increase since 2009. But for most beneficiaries, rising Medicare premiums threaten to wipe out any increase in payments, leaving them without a raise for a third straight year.

About 45 million people — one in seven in the country — receive both Medicare and Social Security. By law, beneficiaries have their Medicare Part B premiums, which cover doctor visits, deducted from their Social Security payments each month.

When Medicare premiums rise more than Social Security payments, millions of people living on fixed incomes don't get raises. On the other hand, most don't get pay cuts, either, because a hold-harmless provision prevents higher Part B premiums from reducing Social Security payments for most people.

David Certner of AARP estimates that as many as three-fourths of beneficiaries will have their entire Social Security increase swallowed by rising Medicare premiums next year.

It's a tough development for retirees who lost much of their savings when the stock market collapsed, who lost value in their homes when the housing market crashed and who can't find work because the job market is weak or they are in poor health.

"You just don't have the words to say how much this impacts a person," said Joyce Trebilcock, a retired legal secretary from Belle, Mo., a small town about 100 miles west of St. Louis.

Like most U.S. retirees, Trebilcock, 65, said Social Security is her primary source of income. She said a back injury about 15 years ago left her unable to work, so she applied for disability benefits. Now, she lives on a $1,262 Social Security payment each month, with more than $500 going to pay the mortgage.

"I've cut back on about everything I can, and I take the rest out of my savings," Trebilcock said. "Thank God I've got that. That's going to run out before long, at the rate I'm going. … I have no idea what I'm going to do then."

Medicare premiums are absorbing a growing share of Social Security benefits, leaving retired and disabled people with less money for other expenses, according to a report by the Congressional Research Service.

Social Security recipients spend, on average, 9 percent of their benefits on Medicare Part B premiums, plus 3 percent on premiums for the Medicare prescription drug program. By the time someone retires in 2078, he or she will spend nearly one-third of their benefits on premiums for both Medicare programs, the report said. Also, when premiums for the prescription drug program increase, as they do almost every year, they can result in a pay cut for Social Security recipients.

"We could very well be entering a period where we're all stuck with flat benefits because of the growth in health care costs," said Mary Johnson, a policy analyst at The Senior Citizens League.

By law, Social Security cost-of-living adjustments, or COLAs, are determined each year by a government measure of inflation. When consumer prices go up, payments go up. When consumer prices fall, payments stay flat until prices rebound.

There had been a COLA every year from 1975 through 2009, when a spike in energy prices resulted in a 5.8 percent increase, the largest in 27 years. Since then, the recession has depressed consumer prices, resulting in no COLA in 2010 or 2011.

Older people might feel they are falling behind because they haven't had a raise since 2009, but many are benefiting, said Andrew Biggs, a former deputy commissioner of the Social Security Administration who is now a resident scholar at the American Enterprise Institute.

Consumer prices dropped, but Social Security benefits didn't drop, Biggs said. At the same time, health care costs went up, but Part B premiums stayed the same for most beneficiaries.

"They are better off because of that," Biggs said. "Somebody else is paying for a greater share of their health care. This will get me hate mail, obviously. But it is what it is."

Next year, the trustees who oversee the Social Security project a 1.2 percent COLA. President Barack Obama, in his spending proposal for the budget year that begins Oct. 1, projects a COLA of 0.9 percent. The average monthly payment is $1,077, so either way, the typical increase is projected to be between $10 and $13.

The current spike in energy prices could boost next year's COLA, if it lasts through September, when the increase for 2012 will be calculated. The COLA will be announced in mid-October.

Medicare Part B premiums must be set each year to cover 25 percent of program costs. By law, they have been frozen at 2009 levels for about 75 percent of beneficiaries because there has been no increase in Social Security. That means the entire premium hike has been borne by the remaining 25 percent, which includes new enrollees, high-income families and low-income beneficiaries who have their premiums paid by Medicaid, the federal-state health care program for the poor.

The 2009 premium levels, which are still paid by about three-fourths of beneficiaries, are $96.40 a month. Most of those who enrolled in the program in 2010 pay $110.50 a month and most of those who enrolled in 2011 pay $115.40.

The Medicare trustees project a Part B premium of $113.80 a month for next year. Obama's budget projects a monthly premium of $108.20, said Donald McLeod, a spokesman for the Centers for Medicare and Medicaid Services. McLeod cautioned that the projections could change significantly by September, when 2012 premiums are calculated.

Under either projection, a small share of beneficiaries would get lower premiums. The vast majority would get higher premiums that could swallow their Social Security COLA.

"That little raise helps us," said Estelle Jones, 66, of St. Paul, Minn. "Food, heating bills, water bill, all that stuff has gone up. … All my medicines are very expensive, and every month I have to figure out how I am going to pay for them."



Congressional Research Service report:

Centers for Medicare and Medicaid Services:

Social Security trustees' reports: