Medicare Part B 2012 Premiums Lower Than Projected

The Obama administration today announced that premiums for Medicare Part B coverage in 2012 will be $99.90 a month for most beneficiaries, a smaller-than-expected increase over the $96.40 paid this year by a majority of elderly and disabled beneficiaries. Part B pays for physician visits, hospital outpatient costs and certain other services. A 3.6 percent Social Security cost-of-living adjustment, the first in three years, will more than make up for the small increase, according to the Department of Health and Human Services.

The Associated Press: "Medicare's basic monthly premium will rise significantly less than expected next year, the government announced Thursday. That could pay political dividends for President Barack Obama and for Democrats struggling to win over seniors in a close election" (Alonso-Zaldivar, 10/27).

Bloomberg Businessweek: "About 45 million retired and disabled people will pay lower-than-projected Medicare premiums for doctor visits and other outpatient services next year, the U.S. said" (Eisenberg, 10/27).

Politico Pro: "Medicare Part B premiums will be about $7 less per month than originally projected for 2012, HHS officials announced Thursday. The Part B deductible will also decline by $22. ... This announcement follows news in September that Medicare Advantage premiums will fall an average of 4 percent in 2012, while premiums for the Part D prescription drug program will essentially hold steady at their 2011 levels" (Feder, 10/27).

Forbes: "[B]etter off seniors who pay additional income-based premiums for Part B, which covers doctors and out-patient services, will actually see those monthly premiums fall. For example, a single senior with an adjusted gross income between $85,000 and $107,000 will pay a total monthly Part B premium of $139.90 in 2012, down from $161.50 this year. A couple with an AGI of more than $428,000, who are both on Medicare, will pay total Part B premiums for both of them of $639.40 a month, down from $738.20— a 13% drop" (Novack, 10/27).

The Hill: "CMS administrator Donald Berwick said the lower-than-expected premium hike was due to two principal factors: historically low healthcare utilization rates, due in part to the health reform law's investment in prevention; and the 3.6 percent Social Security cost-of-living hike announced earlier this month.Due to the COLA adjustment, seniors won't be held harmless for Medicare premium increases as they have in recent years. As a result, the increase is lower and more evenly spread out than initially projected" (Pecquet, 10/27).

USA Today: "In a statement accompanying release of the Medicare premiums, Health and Human Services Secretary Kathleen Sebelius said seniors have nothing to fear from the new health care law. 'The Affordable Care Act is helping to keep Medicare strong and affordable,' she said. ... A leading nonpartisan expert on Medicare said she doubted election-year politics are 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" (10/27).

Read the Department of Health and Human Services press release and fact sheet on Medicare premiums and deductibles for 2012.