Most people in Medicare will pay the same Part B premiums next year as they did this year. But others — including boomers who will be getting Medicare for the first time in 2011 — will pay higher monthly amounts. In addition, beneficiaries with high incomes will begin paying more for Part D prescription drug coverage in 2011.
The new premium amounts, announced yesterday by the Centers for Medicare & Medicaid Services, reflect how a variety of circumstances now determines what people pay for Part B, which covers doctors' visits and other outpatient services — a far cry from the years before 2007 when everybody in Medicare paid the same premium.
There will be three "standard" Part B premium levels next year, a situation brought about by the freezing of Social Security cost-of-living adjustments in 2010 and 2011. Under existing law, when COLAs do not rise, standard Part B premiums must be frozen too — but only for people whose premiums are deducted from their Social Security checks. This means that in 2011 many people will pay the same premiums as they did in 2009 or 2010, but others will pay the new higher standard amount for 2011.
In addition, people with high incomes pay higher (non-standard) premiums for Part B coverage, under a law that went into effect in 2007. Starting in 2011, under a provision of the new health care law, people in the same income brackets will also pay a surcharge for Part D drug coverage on top of their drug plan's regular premiums.
The following are the premiums you can expect to pay in 2011, according to your circumstances:
- If you pay $96.40 a month for Part B in 2010, you'll pay the same in 2011.
- If you pay $110.50 a month in 2010, and your Part B premiums are deducted from your Social Security checks, you'll pay the same in 2011.
- If you are enrolled in Part B but are not receiving Social Security payments or the premiums are not deducted from them, you'll pay $115.40 a month in 2011.
- If you enroll in Part B for the first time in 2011 — regardless of whether you are receiving Social Security payments — you will pay $115.40 a month.
- If your Part B premiums are paid by your state because of low income, you will continue to pay no premiums in 2011, as long as you remain eligible for this assistance.
- If your taxable income is over a certain level ($85,000 for a single person or $170,000 for a married couple filing a joint tax return) you'll pay higher Part B premiums of between $161.50 and $369.10 a month according to income level in 2011.
- If you pay higher-income premiums for Part B, you'll also pay more for Part D prescription drug coverage in 2011. Surcharges range from $12 to $69.10 a month, according to income level, in addition to the premiums that your Part D drug plan charges. You'll pay the regular premium to your plan and the surcharge separately to Medicare.
- If you're among the relatively few people who pay premiums for Part A, which covers hospital care, because you did not pay enough payroll taxes while working to qualify for premium-free coverage, you will pay either $248 or $450 a month for Part A in 2011, depending on how many Social Security work credits you have obtained.
Among other Medicare costs, the annual Part B deductible will rise by $7 to $162 in 2011. The Part A hospital deductible — paid for a stay in the hospital before coverage kicks in — will increase by $32 to $1,132 next year. This is the standard deductible for people enrolled in the traditional Medicare program. Those in Medicare Advantage health care plans usually have different hospital charges.
Patricia Barry is a senior editor at the AARP Bulletin.