The U.S. Department of Health and Human Services says Medicare Part B Premiums, which help cover medically-necessary services for seniors, will be lower than projected for 2012, and the Part B deductible will decrease by $22.
Instead of a monthly premium of $106.60, Medicare Premiums drop to $99.90 (The standard premium in 2011 was $115.40). As part of the Affordable Care Act, Medicare recipients are eligible to receive free preventative services, such as annual physicals, cancer screenings, and some vaccinations, like flu shots.
For those who participate in Medicare drug plans, some plans have a coverage gap, known as the “donut hole:” When a certain amount of money is spent by an individual and their plan provider on covered prescription drugs, that individual becomes solely responsible for the full costs of their prescription drugs, up to a limit of $4,550 out-of-pocket for 2011. With the Affordable Care Act, those who reach the “donut hole” will pay 50% for brand-name drugs and 86% for generic drugs. The health-care reform law aims to close this coverage gap by 2020.
Here is a breakdown of the amounts paid for brand-name and generic drugs within the coverage gap between now and 2020:
Participants Pay This Percentage for Brand-name Drugs in the “Donut Hole”
Participants Pay This Percentage for Generic Drugs in the “Donut Hole”
Most Medicare recipients have paid a monthly fee of $96.40 for Part B coverage since 2008. In 2012, those with Medicare will pay $99.90 for Part B premiums. This increase will be offset for all seniors and those with disabilities, due to the added income they will receive from the Social Security cost of living adjustment (COLA). Retired workers, for example, receive an average COLA of $43 per month. This covers the $3.50 increase in premiums twelve times over.
Medicare Part B covers doctors’ visits, outpatient hospital services, certain home health services, and some preventative services. Those who collect Social Security retirement benefits are automatically enrolled in Part B coverage the first day of the month they turn age 65. Those who get disability benefits from Social Security are automatically enrolled the first day of the 25th month after their Social Security or RRB benefits begin. (Those who live in Puerto Rico and would like to enroll in part B coverage must contact their local Social Security office to learn more about enrollment guidelines.) Individuals 65 and older who are not yet collecting Social Security benefits must sign up by contacting Social Security at 1-800-772-1213.
Changes to Medicare Part A
Medicare Part A, which helps cover inpatient care in various facilities, including hospitals, skilled nursing facilities, hospices, and home health care, will have some premium increases in 2012.
Most individuals will not pay a Part A premium because they paid Medicare taxes while working.
Those who aren’t eligible for premium-free Part A may qualify to purchase Part A if they are either:
- Age 65 or older, entitled to (or enrolling in) Part B coverage, and meet citizenship or residency guidelines
- Are under 65 and disabled, but had premium-free Part A coverage discontinued because they returned to work
Monthly premiums for Part A will increase $1 from 2011 levels to $451 for 2012. The Part A deductible paid by beneficiaries during a hospital visit as an inpatient will be $1,156 in 2012. That’s an increase of $24 from the $1,132 deductible.