HHS: Medicare Part B Costs to Drop in 2012

Revising projections made earlier this year,the Department of Health and Human Services announced Thursday that most Medicare beneficiaries will pay lower premiums and deductibles under the 2012 Part B fee schedule.

"After two years of no increases in Medicare Part B premiums, premiums for most beneficiaries will go up next year by just $3.50 a month, far less than the $10 a month increase that was forecast," said HHS Secretary Kathleen Sebelius. "At the same time, this year's Part B deductible has decreased more than $20."

Part A will see an increase of about $1 per month and deductibles will increase by $24 a year.

Instead of $106.60 previously predicted by Medicare trustees, the premium will be $99.90. And Medicare Advantage premiums will decrease by 4%, while premiums paid for prescription drug plans will stay virtually the same. That $99.90 is $3.50 more than last year's premium, because it is tied to Social Security payments, which this year received a cost-of-living increase amounting to about $43 a month for most recipients, "substantially greater than the $3.50."

This means, Sebelius said, "the typical retired worker will have nearly $40 more per month in their pocket next year."

Sebelius and CMS administrator Don Berwick, M.D., said that the lowered rates or smaller-than-anticipated increases are the result of changes made possible by the Patient Protection and Affordable Care Act, as well as by the benefits from more preventive care and more efficient use of services.