Medicare has finally released the rates for 2011; for some reason it waited until after Election Day to do so, even though the increases are relatively modest.
Premiums:
The Part B premium will increase from $110.50 to $115.40, or only 4.4%.
However, most people will not pay this much because there will be no increase in Social Security payments in 2011, and the “savings clause” that prevents, when this situation occurs, any rise in Part B premiums for those who have them deducted from their Social Security payments will continue in effect.
For those of you who are paying $96.40 because this same savings clause prevented an increase to your Part B premium in 2010 will continue to pay the same $96.40 in 2011.
For those of you who began having your Part B premiums deducted from your Social Security in 2010, and who are paying $110.50 a month, you will continue to pay this same $110.50 in 2011.
For those of you who will be going on Medicare in 2011, and for those of you who do not get your Part B premium deducted from your Social Security, you will pay the $115.40. The exception is that if you are subject to the Part B high income premium surcharge, you will pay the $115.40 plus the surcharge. That information is included at the end of this blog.
Note that the savings clause also applies to those who have their premium deducted from their Railroad Retirement payments, but not for those who have it deducted from their Civil Service annuity payments.
For those few beneficiaries who pay a monthly premium for their Part A, your premium will decrease to $450.00 from $461.00 for those of you who have less than 30 quarters of Social Security coverage, and will decrease to $248.00 from $254.00 for those of you who have at least 30 quarters of coverage. I do not recall a time when this decreased!
Deductibles:
The Part B deductible will increase to $162.00 for 2011 from $155.00 in 2010, or $7.00.
The Part A inpatient deductible will increase to $1,132.00. The inpatient coinsurance for days 61-90 of an inpatient stay will go to $283.00 per day (one-quarter of the deductible) and the coinsurance for lifetime reserve days (days 91 to 150 of an inpatient stay) will go to $566 (one-half the deductible). These amounts are, in 2010, $1,100.00, $275.00 and $550.00 respectively.)
For stays in a Skilled Nursing Facility, the coinsurance for days 21 to 100 will go to $141.50 per day (one-eighth the deductible). (This is $137.50 in 2010.)
The Part B high income premium surcharges will be as follows. Note that “MAGI” is your “modified adjusted gross income” reported on your 2009 federal income tax return. It is the sum of your adjusted gross income plus any interest-free income. Page 20 of Managing Your Medicare explains this in depth. (Medicare calls these "income related monthly adjustment amounts" or "IRMAAs.")
If you were single and had a MAGI over $85,000 but less than $107,000, or if you were a couple filing jointly with an MAGI of over $170,000 but less than $214,000, your monthly Part B premium will be $161.50 a month, or a surcharge of $46.10 a month.
If you were single and had a MAGI over $107,000 but less than $160,000, or if you were a couple filing jointly with an MAGI of over $214,000 but less than $320,000, your monthly Part B premium will be $230.70 a month, or a surcharge of $115.30 a month.
If you were single and had a MAGI over $160,000 but less than $214,000, or if you were a couple filing jointly with an MAGI of over $320,000 but less than $428,000, your monthly Part B premium will be $299.90 a month, or a surcharge of $184.50 a month.
If you were single and had a MAGI over $214,000, or if you were a couple filing jointly with an MAGI of over $428,000, your monthly Part B premium will be $369.10 a month, or a surcharge of $253.70 a month.
If you were married and living together, but file separately, and had a MAGI of over $85,000 but less than 129,000, your monthly Part B premium will be $299.90 a month, or a surcharge of $184.50 a month.
If you were married and living together, but file separately, and had a MAGI of over $129,000, your monthly Part B premium will be $369.10 a month, or a surcharge of $253.70 a month.
Note that the surcharges are calculated as if you would normally be paying $115.40 a month, the standard Part B premium for 2011, but, of course, you may have otherwise qualified for the $96.40 or the $110.50 under the “savings clause” provision discussed above, in which case your true monthly surcharge is either $19.00 or $4.90, respectively, more than shown above.
Pages 20-21 of Managing Your Medicare explains how to appeal to Social Security if they use the wrong income, or if your circumstances have changed significantly since you filed your 2009 income tax (perhaps you retired, your business burned down, you divorced, or your spouse died, etc.).
My blog of 10/04/10, “2011 High Income Part D Premium Surcharges,” tells you what your surcharges will be if you are in Part D in 2011.
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