Dear Savvy Senior
I know we won’t be getting a cost-of-living increase in our Social Security benefits next year, but I haven’t heard about Medicare. What will the Medicare premiums and deductibles cost seniors in 2011?
Recently Retired
Dear Recently,
The new Medicare premium, deductible and co-pay charges for 2011 were all announced a few weeks ago and the changes for most seniors will be minimal, unless you’re a high-income beneficiary. Here’s what you should know.
2011 premiums
Because the Social Security Administration will not be giving out a cost of living increase (or COLA) in 2011, the Medicare Part B premiums for most beneficiaries will not go up either. Thanks to the “hold-harmless” law, which prohibits Part B premiums from rising in any year that there’s no COLA, the 2011 monthly premium will remain at $96.40 for most existing beneficiaries, or $110.50 if you enrolled in the program this year.
Unfortunately, this law does not protect new Medicare beneficiaries or those who pay a higher Part B premium based on higher income. New Part B enrollees (those who enroll in 2011) will pay $115.40 per month. While the premiums for higher-income beneficiaries will vary depending on the income level they reported on their 2009 tax returns. Here’s how their Part B premiums break down next year:
• Individuals with incomes of $85,000 to $107,000, or married couples filing joint tax returns with incomes of $170,000 to $214,000, will pay $161.50 per month.
• Individuals earning $107,000 to $160,000 (couples $214,000 to $320,000) will pay $230.70.
• Individuals with incomes of $160,000 to $214,000 (couples $320,000 to $428,000) will pay $299.90.
• Individuals over $214,000 or couples above $428,000 will pay $369.10.
Another change high-income beneficiaries (those with incomes over $85,000, or $170,000 for joint filers) need to be aware of is a new surcharge on Part D premiums. High-income seniors that have a Medicare Part D prescription drug plan will pay an additional $12 to $69.10 per month, depending on their income, on top of their regular Part D premiums.
Deductibles and co-pays
Other Medicare changes you need to know about that will affect all beneficiaries include the Part B deductible, which will increase to $162 in 2011 (it’s currently $155). And the Part A (hospital insurance) annual deductible which will go up to $1,132 (it’s currently $1,100) for hospital stays up to 60 days. That increases to $283 per day for days 61-90 and to $566 a day for days 91-150. And the skilled nursing facility co-payment for days 21-100 will increase to $141.50 per day (it’s currently $137.50). For more information on all the Medicare premiums and coinsurance rates for 2011 see medicare.gov or call 800-633-4227.
Savvy Tip: If you’re a high-income beneficiary and your income has fallen since 2009 (the tax year used to determine your 2011 premiums) you may be able to reduce or eliminate your surcharge. To qualify, your income loss must be tied to a life-changing event such as a marriage or divorce, a job loss or reduced work hours (including retirement), loss of income from income-producing property, or cuts in pension benefits.
To learn more see SSA publication (No. 05-10161) “Medicare Part B Premiums: Rules for Beneficiaries with Higher Incomes” at www.ssa.gov/pubs/10116.html.
Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org.
Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book.