Rise in Medicare Premiums Less Than Feared in 2012

Medicare rates to rise less than feared next year

WASHINGTON (AP) - 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 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's 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 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 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.

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Why is it I paid more than 3 times as much into Medicare than my wife but her Medicare benefits are the same as mine while using them 3 times as much a I would ?

Sounds like a lefty ponzi scheme that favors women ot me.

November 01 2011 at 12:22 PM Report abuse rate up rate down Reply


November 01 2011 at 10:24 AM Report abuse rate up rate down Reply

My wife and I will be going on Medicare in January 2012. Appears that our monthly premium will be approaching $200 each or $4,800 - $5,000 a year. We must be paying for additional seniors.

November 01 2011 at 9:53 AM Report abuse rate up rate down Reply

I'm so grateful. I'm on a fixed income, and every dollar counts. I'm voting for Obama. He at least knows I'm alive. The GOP/TP would like to correct that problem.

October 31 2011 at 7:38 PM Report abuse -2 rate up rate down Reply

I hope that the American people are smart enough this time to not vote for Obama and the Democrats because of all of the sh.. that they have pulled over the years and decades. But , we will have plenty that will sell their vote for $7.00
and think what a remarkable job he is doing

October 31 2011 at 6:39 PM Report abuse +2 rate up rate down Reply

They take $99.00 from our S/S check..We have to buy suppliment insurance..We pay for prescription ins.Premiums every month.We pay co-pays on our meds..Medicare doesnt cover all meds, so your other plan wont either..It comes out of your pocket..Also you must get generic..There are different prices for different tiers..Theyve added a tier to our group this year..So they can charge more for some of the generics...Besides the monthly premium we pay a co-pay on our meds out of our pocket......They add up all the money the ins, plan pays for your meds each month...THEN they add that to the cash you paid for the meds and put that into your do-nut hole..Since weve already paid the cash it should not be put into the donut hole...Only the money the Ins plan paid should go into the donut hole...That is double dipping....They want to get you into the donut hole quicker so you will have to pay sooner..My perscription was $180.00 and I paid $75.00...The Ins co paid $105.00.......They already got the $75.00 from me, so the ins,payment should only be the one that counted toward the donut hole......Nope....They add both of then together and add them to the donut hole...$180.00 goes in there to make my total go up quicker...The donut hole cut off is a joke.Right now, before the 2012 raises take effect Im at $500.00 a month for premiums, co-pays etc and I dont have any fatal illness..People think we S/Sers have a free ride and they will get one too when (and if) the healthcare bill goes thru...NOT!! Weve been living on the same amount of money for the past2 years while everything we pay for has gone up..Taxes, fees, utilities,food..Home ins...Car ins..I just canceled my car ins..I have not bought one piece of fruit, vegetable or meat in 2 years....When we planned our retirement we didnt plan to live in luxury...we just planned to live....Bad idea...

October 30 2011 at 9:50 PM Report abuse +2 rate up rate down Reply

Lets see..I work almost 50 years, and husband works 50 years..We both pay for S/S plus our employer matches what we pay...Husband draws only a few years before he dies..I will only draw a few years...No way will I get what we all paid in..Had the Gov. invested that money we would be in great financial shape now..Johnson decided to sign a bill putting the S/S money in the general fund..They should have paid it back with interest., like they are doing with China now..They never paid back one penney..That is stealing made legal...Hey,,,,,,They run the country, they can write a bill for whatever they want and make it legal.....Theyve pulled every dirty deal they could and gotten money any illegal way they can to fund their wars(Including selling guns to Mexican drug cartels) do you think they are worried about little old S/S??They are going to keep upping the age til most people are too old and dead before they qualify to receive it....66 to 68 to 70 to 72....You get the picture.................

October 30 2011 at 9:03 PM Report abuse +4 rate up rate down Reply

Percentage wise it is still more than seniors recieved in increased SS benefits. Too bad the politicians figured out that if you included health care, fuel and food in the COLA, the three things that senions have to buy, seniors would have gotten nearly a 15% increase. Thank you politicians, may any of you who did this rot in hell.

October 30 2011 at 5:02 AM Report abuse +6 rate up rate down Reply

How & when will this madness end? We pay all our lives (I had an SS card at 16 & am now 66, that's 50 years) our Congress & the Pelosis of the world (Democrats in charge) have no idea what they have done over timme & are doing now. This is all BS, the Seniors are not the problem, it's all the others that never paid a dime ******* on the tet of medicare & medicaid for all their needs, from illegals to prisoners families and anyone else that our wonderfull leaders want to add to a program for retirees. These others paid in 0 and pay nothing for the services they demand (growing daily). This is not how these programs (including SS) were intended. These benefits belong to those that earned them & no one else. We have hundreds of varying programs that those that are in need can & should rely on (also created by Dem's) . Keep them away from programs created and desighned to assist the elderly. WAKE UP

October 29 2011 at 8:33 AM Report abuse +6 rate up rate down Reply

Have you ever wondered why the Democrats in Congress that forced you into Socialist Gubmit Crappy Social Non Security Ponzi Scheme while opting themselves out of it and giving themsleves lavish, wonderful, private retirement plans that pay them 10 times as much as you will get - but somehow they calim aren't good enough for you for some insnae reason only you will believe?

It is because Democrats think you are stupid, easily fooled, they hate you, they want to be your slave master, they want you dependent on the pitiful fare they swill your way and - they are evil to their very core that is nothing but vapid and putrid vomit. Never forget it. Until Congress is on SS and Medicare, with no other perks, just like the rest of us - we are enslaved to these vile and despicable whack jobs. The next congress must fix this or be held to a higher standard they cannot meet.

October 28 2011 at 11:39 PM Report abuse +2 rate up rate down Reply
2 replies to dabrownman's comment

So true and Dems hate you for it.

October 29 2011 at 10:00 PM Report abuse +5 rate up rate down Reply

It was also bj clinton that instituted a income tax on Social Security.

October 30 2011 at 5:03 AM Report abuse +4 rate up rate down Reply
1 reply to thescot's comment

But it was Ronald Reagan who instituted the income tax on 50% of Social Security benefits.

I guess you just forgot about that. lol

October 31 2011 at 8:39 AM Report abuse +1 rate up rate down