Changes in Medicare Premiums, Deductibles, etc., in 2012

Most of the Medicare change amounts have been put out for 2012, and, as always, there is good news and bad news.

The Part B deductible for 2012 will be $140, down $22 from $162. This will be a small help to those of you who don’t have a Medigap policy, or whose policy doesn’t pay your Part B deductible.

Because there was a Social Security cost-of-living increase (of 3.6%), Medicare Part B monthly premiums were permitted to rise for the first time in three years, and the standard premium you will pay is $99.90. This is up $3.50 for most Medicare beneficiaries, but is down for those of you who were first entitled in 2010 and 2011.

The best news is probably for those of you who have to pay the High Income Part B Premium Surcharge. Your monthly surcharge will decrease from $6.10 to $33.90 per month, depending on your income level. This is because, as I pointed out in a blog some time ago, when the premiums for most beneficiaries are held flat, you have to help make up the difference. Because most beneficiaries have to pay a little more each month in 2012, you get a break. And also remember that your 2012 surcharge will be based on your 2010 income, and this may put you in a higher or lower surcharge bracket.

The Part A inpatient hospital deductible goes up by $24 in 2012 to $1,156. This is the amount you are responsible for the first 60 days of an inpatient stay. And, of course, the various co-pays for longer hospital stays, and for skilled nursing facility (SNF) stays beyond 20 days, are also affected by this change, but these are modest.

Also nil or very modest is the change in the Part A premium for those very few percent of beneficiaries who pay for Part A. For those currently paying $248 a month, your premium won’t change, and for those paying $450, it will only go up a dollar a month!

The Centers for Medicare & Medicaid Services reports that in Part C – Medicare Advantage or Medicare managed care – the premiums have gone down by 4%, on average. But always remember that you need to do your homework every year to see if you are in the best Plan you. And remember, you mostly have only until December 7 to do this. An exception is that, if there is a Plan with a five-star quality rating where you live (and there may not be one where you are), you can switch to it any month in 2012.

For Part D, again changes are minimal from 2011, but the overall recommended structure has improved for beneficiaries. The deductible is up $10 to $320, but remember that many plans have none or a smaller deductible than this. The next payment band, the 25% Coinsurance Band, covers the next $2,610 of your drugs, and you pay 25% of this, or $625, while your plan covers $1,957.50. Your plan can structure this differently. In the “donut hole,” in 2012 you will have to pay only 50% of the cost of your brand name drugs, as you did in 2011, but now the government will pay 14% of the cost of your generics, up from 7% in 2011. This is the improvement I mentioned above. And, of course, in the 5% insurance band, which starts when your drug “expenses” reach $4,700, you will pay a minimum of $2.60 for a generic or $6.50 for a brand name drug, but no more that 5% of its cost, if that is greater than these amounts. (And by “expense” we count your deductible, anything you spent in the 25% band and in the donut hole, AND the 50% that manufacturers pay on your brand name drugs in the donut hole (but not the 14% the government pays on your generics).

The structure for “Extra Help” beneficiaries is, of course, different, but the increases these beneficiaries will experience are nil to minimal.

And on the whole Part D premiums have decreased slightly for 2012.

And there is good news for those of you who have to pay the High Income Part D Premium Surcharge. Your monthly surcharge will decrease slightly, from between $0.40 to $2.70 a month in 2012, and the surcharges will be from $11.60 a month to $66.40 a month. But remember, as with the High Income Part B Premium Surcharge, your surcharge will be based on your 2010 income, and this may put you into a higher or lower bracket.


Originally Posted 11/05/11

Keywords: Medicare Premiums   Medicare Deductibles