October 28, 2011 in Nation/World

Medicare rate hike eases

Premiums will rise in 2012, but not as much as feared
Ricardo Alonso-Zaldivar Associated Press
 

WASHINGTON – Medicare’s basic monthly premium will be lower 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.

The new Part B premium for outpatient care will be $99.90 a month for 2012, or about $7 less than projected as recently as May.

The bottom line: most seniors will pay an additional $3.50 a month next year, instead of $10.20, as forecast earlier.

Some younger retirees who enrolled recently will actually pay less. They have been paying up to $115.40 a month. Instead, they’ll also pay $99.90 next year.

The main reason for lower-than-expected premiums has to do with the interaction between Social Security COLAs and Medicare.

But the Obama administration is hoping seniors will get a simple 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 doubled down to reverse any perception that Obama is steering Medicare into decline.

The Medicare news means the majority of seniors 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 beneficiaries. That was due to the lack of a Social Security cost-of-living adjustment during the depths of the economic downturn. But Social Security recently announced a COLA raise in monthly checks averaging $39 for 2012.

Health and Human Services Secretary Kathleen Sebelius said it’s “pretty remarkable” that premiums will stay in check. Seniors have nothing to fear from the health care law, she suggested. “Thanks to the Affordable Care Act, Medicare is providing better benefits at lower cost,” said Sebelius.

Earlier this year, officials had announced that premiums for Medicare’s prescription benefit would remain unchanged for 2012, on average. Similarly, average premiums for popular Medicare Advantage plans will dip slightly in 2012. But those announcements do not have as much impact. Averages used by the government don’t reflect individual experiences. And fewer beneficiaries are enrolled in either of those two benefits.

The Part B premium is one number that most of the 48 million people on Medicare can connect with.

© Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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