At Medicare, Mum’s The Word

At Medicare, Mum’s The Word

By Mary Johnson
For the past 16 years, Medicare premium and deductible information has been routinely released by the Centers for Medicare and Medicaid Services (CMS) in September or October. But for reasons yet to be fully explained by Medicare officials, the release of 2011 premium and deductible information was delayed until after the November elections last year. This added further to the unnecessary challenges and difficulties for Medicare benefit counselors trying to help seniors figure out 2011 healthcare costs, and budget for health plan and drug coverage changes.

Perhaps the Administration and Members of Congress are having a difficult time explaining to senior constituents why Social Security benefits remain frozen when Medicare premiums continue to go up. And where are those lower Part B premiums promised under healthcare reform that we keep hearing about?

Once elections were safely out of the way, CMS finally announced that the standard Part B monthly premium would rise from $110.50 in 2010 to $115.40 in 2011. But a special “hold harmless ”provision of law means that about 75 percent of Medicare beneficiaries will pay less than that. Beneficiaries who were enrolled in Medicare Part B by the end of 2009 will continue to pay a monthly benefit of $96.40, and people who newly enrolled in 2010 will continue to pay $110.50 per month. Under the “hold harmless” provision, the Medicare Part B premium is adjusted when Part B increase is higher than the amount of an individual’s COLA to prevent a reduction in Social Security benefits from one year to the next. Since there was no COLA in 2010 or 2011, the provision was triggered both years.

Hold harmless protection however, does not apply to Part D, Medigap, or Medicare Advantage premiums. When those premiums go up, they reduce the amount of Social Security left to cover everything else. The protection also doesn’t apply to people who pay higher premiums based on income, or people who will enroll in Medicare Part B for the first time this year.

I’m interested in learning your experiences with healthcare cost changes. Did your drug plan or health plan close? Were you notified in a timely manner and were new costs made clear to you? Did you have to switch plans in 2011?

Sources: 2010 Medicare Trustees Report, August 5, 2010.