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.
"Nearly 20.5 million people have already taken advantage of one or more of the potentially life-saving preventive services that are now offered in Medicare without a co-pay or deductible," Sebelius said. "That includes a free annual wellness visit, a chance to sit down with one's healthcare provider and talk about any health issues they're dealing with."
Added CMS administrator Don Berwick, MD: "More people are sharing in the smaller increases in costs spread over a larger number of people, and the cost rise is lower than we predicted."
Jonathan Blum, head of the Center for Medicare, said that for Medicare and Medicare Advantage, the program has seen "a continued lower trend, and it's happening throughout the Medicare program, but in some of areas of the program, where we've had high spikes in the past, have been virtually flat in spending. Today's announcement just confirms a current data trend due to much lower utilization and spending growth throughout the Medicare program."
HHS has released a CMS fact sheet detailing premiums and deductibles affecting Medicare beneficiaries.
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