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Medicare Part A and Part B Premiums and Deductibles

Editor’s note: Those seniors who are not in a Medicare Advantage Program are subject to the following premiums and deductibles. You will note that the actual increases are not final for 2010. The next posting addresses Medicare Part D costs to participants not in an Medicare Advantage Plan.

Now you can begin to see the implications of taking half a billion out of Medicare Advantage and shifting the costs to seniors.

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As this is written, CMS has not released final Part A and Part B premium and deductible amounts for 2010. This delay was caused by the impact of no Social Security Cost of Living Adjustments (COLA) for 2010. As a result, a “hold harmless” regulation is triggered that waives otherwise scheduled Part B premium increases when no COLA occurs for the vast majority of Medicare beneficiaries. However, for 2010, 27% of beneficiaries would still be impacted including low-income individuals who are eligible for Medicare and Medicaid, higher-income Medicare beneficiaries, new Medicare enrollees and enrollees whose Medicare premiums are not deducted from their Social Security checks At the end of September, .the House of Representatives overwhelmingly passed H.R. 3631, the Medicare Premium Fairness Act, which “Amends title XVIII (Medicare) of the Social Security Act with respect to the part B (Supplementary Medical Insurance Benefits for Aged and Disabled) premium for 2010. Makes such premium, and the related monthly actuarial rate, the same as those for 2009.” The bill has been referred to the Senate Finance Committee, and requires Senate and the President’s approval to become law.The 2009 Annual Report of the Boards Of Trustees Of The Federal Hospital Insurance And Federal Supplementary Medical Insurance Trust Funds preliminarily set the Part B premium increase from $96.40 in 2009 to $104.20 in 2010, with adjustments to those rates based upon beneficiary income.

CMS will thus not release the final Part A and Part B premium amounts for 2010 until the fate of HR 3631 is determined. Assuming it is signed into law, leaving Part B premiums frozen, and assuming Part B deductible and Part A amounts remain unchanged from the preliminary amounts set forth in the 2009 Annual Report of the Boards of trustees, the applicable amounts for 2010 would be as follows:

  • Part A Monthly Premium: $458.00
  • Part B Monthly Premium: $  96.40
  • Part A Annual Deductible $1,112
  • Part B Annual Deductible $   146

As a reminder, Medicare Part A pays for inpatient hospital, skilled nursing facility and some home health care and Part B refers to . About 99 percent of Medicare beneficiaries do not pay a premium for Part A services, since they have at least 40 quarters for Medicare-covered employment. The Part A deductible is the beneficiary’s only cost sharing for up to 60 days of Medicare-covered inpatient hospital care, but additional cost sharing applies after 60 days.  Medicare Part B, covers physician services, outpatient hospital services, certain home health services, durable medical equipment and other items.

CMS annually updates Medicare Beneficiary  premiums, deductibles and co-payments, using formula driven  adjustments set by statute.  By law, the standard Part B premium must be sufficient to cover 25 percent of the program’s costs,  with Medicare bearing  the remaining 75 percent.  Similarly, statutory formulas are used to determine the Medicare Part B deductible, the Part A deductible for hospital stays and other enrollee contributions.

In accordance with the Medicare Modernization Act, single beneficiaries and married couples with annual incomes exceeding a specified amount now pay a higher percentage of the cost of Medicare Part B coverage, through the Part B premium. These higher-income beneficiaries pay a monthly premium equal to 35, 50, 65, or 80 % of the total cost, depending on their income level.

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October 1, 2009 - Posted by | Federal Government, healthcare | , , ,

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