Social Security payments will increase 1.7% in January 2013. That means an additional $17 for a person whose monthly Social Security check is $1,000. 1.7% of $2,000 is $34. So this is a modest increase for people living solely on Social Security – and I meet a lot of people like this.

At the same time, the Medicare Part B premium will go up $5 per month to $104.90. This amount will be taken out of most people’s Social Security checks starting in January.

HELP FOR PART B PREMIUM

In Arizona, anyone on Medicare whose monthly income is less than $1,277 (individual) or $1,723 (a married couple) should not be paying that $104.50 Part B premium. They should be enrolled in the Medicare Savings Program through which the state pays their Part B premium. People who get Part B help will also be signed up to get help with their prescriptions costs. This is called the Low Income Subsidy.

Medicare beneficiaries who get the Low Income Subsidy (LIS) will pay $6.60 for brand drugs and $3.50 for generics in 2013. Most brand drug co-pays on Part D plans are $35 – $45, so getting the LIS can be a huge help for people.

If you, or anyone you know, might qualify for this help, send me an email.  I can provide the Medicare Savings Program application for Arizona.

OTHER MEDICARE COST INCREASES:

Medicare Part A covers hospitalization and has a $1,184 deductible in 2013. Part A also covers skilled nursing facility charges, home health care, and hospice.

Medicare Part B covers everything else (except drug coverage, which is Part D) and has a $147 deductible in 2013. This is up from $140 in 2012. This deductible comes into play for people who have a Medicare supplement plan N because they must pay the Part B deductible deductible each year.

Most Medicare beneficiaries in Arizona are not directly affected by these increased costs because they have a Medicare supplement Plan F or are enrolled in a Medicare Advantage plan.

Almost half of all Medicare beneficiaries in Pima, Pinal, and Maricopa counties in Arizona are enrolled in Medicare Advantage plans, so the Medicare costs that are going up in 2013, don’t affect them directly. Of course, everybody has to pay the Part B premium (unless the state is paying it for them),and most co-pays that come with Medicare Advantage plans are going up in 2013.

So if you are getting $17, or $30, or $40 more in your Social Security next month, you’ll be spending that much and more on your medical costs.

I had an appointment yesterday with my tax accountant who is over 65 and on Medicare.  She is my accountant but not my client, but she asked me about a bill she got from her dermatologist.  The bill showed the charges for her treatments in the office, and it showed what Medicare paid and what her Medicare supplement paid.  It looked like the doctor’s office was “balance billing her” – though I didn’t look that closely at the bill.  I told her to call the doctor’s office and ask for an explanation of the bill.

One clue I did not pick up on:  The amount due was $162.

Second clue: This lady has a Plan N Medicare supplement.

As I drove away from the appointment, my cell phone rang.  It was my accountant calling to tell me she had spoken with the doctor’s office about the bill. They told her she has a deductible in her coverage, and that’s what the $162 is.

Duuuuuuh! How could I forget that?  Medicare Part B has a $162 deductible, and Plan N does not cover it.  Plan N has a lower premium than a Plan F or C because a person must pay a $20 co-pay when they go to a doctor’s office. They also pay a $50 co-pay if they go to the emergency room.  And they pay the Part B deductible each year ($162 in 2011).

I am an insurance agent and I forgot about the Part B deductible not being covered by Plan N.  (Of course, I was not in my working-and-explaining-Medicare-mode when I was meeting with my tax accountant.) I can see lots of folks getting Plan N for a lower monthly premium and then having greater confusion when they get their medical bills.

I usually suggest people get a Plan F Medicare supplement. “Think F as in full coverage”, I say.  With Plan F they don’t have to worry about co-pays and deductibles because Plan F fills all the gaps in Medicare.  I have had several clients who were diagnosed with cancer, and they called me specifically to tell me how grateful they were to have a Plan F Medicare supplement because they never had to think about their medical bills.

I just thought I’d pass on this tidbit of wisdom I gained this week.