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2012 Medicare Part B Premium: $99.90. It should be $300.

by on Nov. 07, 2011, under Health

The Medicare Part B monthly premium will be $99.90 in 2012. This will mean a small increase for the majority of Medicare beneficiaries who have been paying $96.40 since 2009. Those who began their Medicare coverage in 2010 or 2011 have been paying $110.50 or $115.40, so their Part B premium will go down.

For people receiving Social Security, the Part B premium is taken out of their monthly check.  Because there was no cost of living adjustment (COLA) in 2010 or 2011, the Part B premium was not raised for those already in the Medicare system.  Starting in January 2012, Social Security recipients will be getting 3.6% more in their check each month. That means $36 for a person receiving $1,000 per month.

PART B PREMIUM SHOULD BE $300.

The bad news for Medicare is that the Part B premium really should be much higher, because $99.90 times 47 million Medicare beneficiaries equals just  25% of the total money spent under Part B.  This means that 75% of Medicare Part B expenditures are paid through the federal government’s general fund.   And this is what politicians are fighting over as they seek to cut the federal budget. Republicans want to cut the amount of general revenue funds that go to Medicare – but how to do that without hurting seniors is the trillion dollar question.

PART A BUDGET IS MOSTLY BALANCED

Medicare Part A covers hospitalization, skilled nursing facility charges, home health care, and hospice. Payroll taxes go directly to the Part A TRUST fund, and tax revenues covered all Part A expenditures up until 2008. Since 2008, the trust fund has had to use some of its surplus saved up from previous years to balance the Part A budget.

PART B BUDGET IS NOT BALANCED

The Part B budget is way out of balance because Part B premium revenues cover only 25% of Part B expenditures.  Part B covers things such as doctor services, lab tests, diagnostic tests, physical therapy, chemotherapy and radiation therapy.

During the Bush Administration, Congress approved higher Part B premiums for Medicare beneficiaries earning more than $85,000 as an individual or $170.000 as a couple. Premiums are based on a sliding scale for income up to $214,000 for an individual and $428,000 for a couple. The highest Part B premium will be $319.70 in 2012.

About 5 percent of Medicare beneficiaries now pay a higher premium based on their income.  Under some budget-cutting plans, 25% of seniors would pay a higher Part B premium in the future.

TO SUMMARIZE: The Part B premium should be $319.70, but 95% of folks on Medicare are getting a 75% discount. This is what the fight over Medicare is all about. And, with baby boomers turning 65 at a rate of 10,000 per day, the number of people covered by Medicare is growing faster than ever before and will make the revenue to expense gap even wider.

This entry was posted on Monday, November 7th, 2011 at 8:42 am and is filed under Health. Tags for this post: , , , , , , , , , , . You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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  • Tip O’Neill

    Talking about the cost of Medicare being out of control is really Repub political framing.

    It certainly is out of control – as is all private and all uninsured medical care.

    It is the cost of medical care which is rising uncontrollably and needs to be addressed.

    In the meantime every cut to the government’s contribution to Medicare simply RAISES the cost to patients.

    I’d love to see government actually tackle the cost of medical care in the US rather than demagogue about Medicare.

    Other countries have done it successfully – it isn’t that hard. Maybe Canadian politicians are just smarter than ours ?
     

  • Carole

    For your information, most of us are paying $300 a month for medical insurance. Yes, we pay $96.40 for Medicare, but since that only covers 80% of medical bills, you HAVE to have something else on top of it. Whether you have a Medicare Advantage plan or a supplement plan, you are paying another $150-200+ for that. Try it sometime when you only get $1200 a month to live on and $800 of that is rent. Give me a break. You make it sound like we are all out here living the life of Riley. Well, we are NOT. We are going to food banks and anywhere we can for assistance just to survive. This, after working all our lives. Why don’t you go after the lazy people who are on welfare who don’t want to work? They are the ones who are bleeding the system, not the seniors!

    • Tip O’Neill

      Actually maybe you should talk to Denise – I pay much less than that for supplemental

      • art

        I pay $220/month for Plan F in Florida.

        • medicareblogger

          Your Medicare supplement premium if different from the Medicare Part B premium.  Most people don’t pay attention to the Part B premium because it is taken out of their Social Security check. You will be paying  $99.90 each month for Medicare Part B in addition to  your Plan F premium.

    • medicareblogger

      Carole:  I was just stating the facts, and why Medicare is being attacked as an entitlement our country can’t afford – according to some politicians. 
       
      I have written in many of my blog posts that it is the people who have worked hard all their lives… and were once middle class… and played by all the rules …who end up getting the short end of the stick. Health care costs have gone up so much because it is a profit-driven business, and our health insurance industry is profit-driven.  And where does that leave people like you? 
       
      What is frightening is that the answer to that question by many of our political leaders is:  “Tough luck for you… you need to pay more for your health care. The government isn’t going to subsidize you any more.”
       
      I am not in favor of this political position. I’m just telling it like it is.

  • http://www.healthcaretownhall.com Jeremy Engdahl-Johnson

    2012 Cost-of-living adjustments for Medicare  benefits.  http://www.healthcaretownhall.com/?p=4512

  • Jerzeybob

    Gee I wonder what the political leaders will say if they have to pay their fair share which they pay nothing for.  And get it for life.  Take a dollar from their pockets and see what happens.

  • Mary

    We need MEDICARE FOR ALL.  This will bring down the cost of insurance.  Medicare  now covers mostly seniors who have higher medical costs.  With everyone covered,  the less costly healthier persons would be included.   Right now younger people are having a hard time with insurance.  Cost are going up for them.  Many companies are dropping family plans so the husband or wife is not covered.  Drug costs are going though the roof.  There are plenty of advantage plans as well as original medicare so there will be competition and we can adjust plans for preventive and child care as needed.  It would be a win-win for senior and everyone else. We are the only 1st world country that does not do something like this.   There will be profit and oversight and medicare could then afford to pay the doctors more.   The only thing holding this idea back is greed. 

  • Jim

    My main problem is that the threshold for an increased Part B premium is $170k for a couple on Medicare.  This threshold needs to be cut by at least 50%.  I do not believe we need to increase the premium for those living solely on social security, but I find it hard to believe that a couple making over $85k could not afford the next level increase in Medicare Part B premium.  But I think if you did a poll, most older people no matter how much money they make would be opposed to any increase in premiums.  From a personal point of view, I will get a 3% increase in social security or about $1000 but I will get a decrease on Medicare.  That is rediculous.  In addition, when my wife goes on Medicare next year, her premium costs will drop by $100/month from current private insurance.  Basically, the older generation is not paying their fair share and are bankrupting this country.

    • Michael Lawrence

      I can almost guarantee you that your wifes current coverage exceeds the Medicare Part B coverage and when she goes on Medicare she will wind up paying substantially more than the $ 100.00 difference you mention to purchase a Medicare Supplemental and Drug coverage insurance plan.  So, net, bottom line you will be more out of pocket for medical coverage than you are now.  Just the facts!

      • medicareblogger

        Michael:  Whether Medicare will be more expensive than a person’s employer coverage depends on how good the coverage is.  People who work for large companies or governement have great health insurance. But people who work for mediudm or small companies usually have lousy coverage with high deductibles and co-pays. For those people, Medicare is a better deal, and paying $100 a month for Part B plus $130 – $200 for a Medigap plan is actually a good deal.

  • medicareblogger

    Jim, you are correct that Medicare is a really good deal – and people who have been paying their own health insurance premiums get to see it first hand when they discover they can get 100% medical coverage between Medicare and a Medicare Supplement Plan F – and it costs them $230 – $300 per month.  Even when you add in a Part D premium, this is incredible coverage for the price.
    I have a feeling the future of Medicare will be for seniors to pay more.  My concern is that most of the people I work with are living on the edge and can’t afford to pay more.  It’s a very complex and difficult problem we are facing. Unfortunately, our political system does not seem to be set up to fix this problem.

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