Medicare -Who Pays and How Much- Part II
Why new Medicare enrollees will be paying $110.50 per month instead of $96.40 per month for Part B

(1/25/10)- Under Medicare law Part B premiums are required to cover about 25% of the average cost of Medicare Part B services incurred by the enrollees. There are about 42.3 million Americans covered by Medicare Part B, of which about 73% also receive Social Security payments.

Under the Social Security Act's "hold harmless" provision, Medicare can not pass along to Social Security beneficiaries a premium hike that is higher than the increase they would receive through Social Security's annual cost-of-living increase.

For the year 2010 and most likely for the year 2011, there was no cost of living increase (COLA) for Social Security beneficiaries

Since Medicare Part B premiums would not cover the 25% cost of Medicare, the remaining 27% of those covered by Medicare and not receiving Social Security payments must make up for the difference. This group unfortunately includes those Medicare Part B beneficiaries who are joining for the first time.

The affected beneficiaries include the 3% of Medicare Part B recipients who are celebrating their 65^th birthday this year, and also the 2% who started collecting Social Security earlier than their "full retirement age". This also includes however, those who postponed getting their Social Security payments past their "full retirement age", since it meant an increased lifetime payment for each year they delayed receiving their payment until they reached the age of 70.

For those falling into this category, Medicare Part B premiums are $110.50 per month instead of the $96.40 per month for lower income beneficiaries. Higher income earners will also be paying higher premiums because of this quirk in the law.

(1/11/10)-The following is the 2010 schedule of what a Medicare beneficiary pays during a skilled nursing facility residency (From Medicare and You-2010):

• $0 for the first 20 days each benefit period
• $133.50 per day for days 21-100 each benefit period
• All costs for each day after day 100 in a benefit period

Under Part A- the following is what a Medicare beneficiary must pay during a hospital stay:

• "In most cases, the hospital gets blood from a blood bank at no charge, and you won't have to pay for it or replace it. If the hospital has to buy blood for you, you must either pay for the hospital costs for the first 3 units of blood you get in a calendar year or have the blood donated.
• $1,068 deductible and no coinsurance for days 1-60 each benefit period.
• $267 per day for days 61-90 each benefit period
• $534 per "lifetime reserve day" after day 90 each benefit period (up to 60 days over your lifetime)
• All costs for each day after the lifetime reserve days
• Inpatient mental health care in a psychiatric hospital limited to 190 days in a lifetime."

Under Hospice Care:

• "$0 for hospice care
• A co-payment of up to $5 per prescription for outpatient prescription drugs for pain and symptom management
• 5% of the Medicare-approved amount for inpatient respite care ( short-term care given by another caregiver, so the usual caregiver can rest

Medicare doesn't cover room and board when you get hospice care in your home or another facility where you live (like a nursing home)"

Under Part B:

• You pay the first $135 yearly for Part B-covered services as your deductible.
• For clinical lab services you pay $0 for Medicare-approved services
• For Home Health Services you pay $0 for Medicare approved services. You pay 20% of the Medicare-approved amount for durable medical equipment.
• For Medical and other services you pay 20% of the Medicare-approved amount for most doctor services (including most doctor services while you are a hospital inpatient), outpatient therapy, most preventive services and durable medical equipment.
• For Outpatient Hospital Services no co-payment for a single service can be more than the amount of the inpatient hospital deductible.

Premiums for Part B will stay the same as for 2009, although higher income beneficiaries will be paying a higher premium than the $96.40 a month level. For new enrollees in Medicare the premium will be at least $110.50 per month. Please see our item dated January, 2010 to see why this situation arose.

For individuals who earn $85,000 or less and for couples who earn $170,000 or less the premium for Part B is $96.40 per month for Medicare Part B coverage.

For individuals earning $85,001 up to $107,000, or couples earning from $170,001 to $214,000 the premium will be $134.90. For individuals earning from $107,001 to $160,000, or couple earning from $214,001 to $320,000 the premium is $192.70. For individuals earning from$160,001 to $213,000, or couples earning from $320,001 to $426,000 the premium is $250.59 and for individuals earning $213,001 or above and couples earning $426,001 or above the premium is $308.30

New enrollees in Part B will pay 15% more than that, $110.50 a month.

Benefit Period

A " benefit period" starts when the beneficiary first enters a hospital and ends when there has been a break of at least 60 consecutive days since inpatient hospital or skilled nursing care was provided. There is no limit to the number of benefit periods covered by Part A during a beneficiary’s lifetime; however, inpatient hospital care is normally limited to 90 days during a benefit period and co-payment requirements ($267 each day)apply for days 61 through 90. If a beneficiary exhausts the 90 days of inpatient hospital care available, he or she can elect to use days of Medicare coverage from a non renewable "lifetime reserve" of up to 60 total additional days. Once used up the 60 days is gone forever. You are responsible for the co-insurance amount of $438 per day while using up this 60 day "lifetime reserve".

 (11/2/09)- Most Medicare eligible beneficiaries should have received their copy of the 2010 "Medicare and You" handbook, which is issued by the government to help you understand any changes made in Medicare and Medicare Advantage plans.

As a quick reminder, there is Medicare Part A, which covers hospitalization and is provided at no charge to enrollees, and Medicare B, which covers fees from doctors and other health care providers, and requires a monthly premium. Premiums for Part B will stay the same as for 2009, although higher income beneficiaries will be paying a higher premium than the $96.40 a month level. For new enrollees in Medicare the premium will be at least $110.50 per month. Please see our item dated January, 2010 to see why this situation arose.

For individuals who earn $85,000 or less and for couples who earn $170,000 or less the premium for Part B is $96.40 per month for Medicare Part B coverage.

For individuals earning $85,001 up to $107,000, or couples earning from $170,001 to $214,000 the premium will be $134.90. For individuals earning from $107,001 to $160,000, or couple earning from $214,001 to $320,000 the premium is $192.70. For individuals earning from$160,001 to $213,000, or couples earning from $320,001 to $426,000 the premium is $250.59 and for individuals earning $213,001 or above and couples earning $426,001 or above the premium is $308.30

New enrollees in Part B will pay 15% more than that, $110.50 a month.

Straight Medicare covers about 35 million beneficiaries, and they need not do anything if they feel their coverage is sufficient. If however, a beneficiary wants to have prescription drug coverage he or she must enroll in Part D. About 17.5 million Medicare beneficiaries have enrolled in Part D coverage.

Since there will not be an increase in the Social Security cost-of-living increase in 2010, premiums will remain the same for Part B coverage.

The annual enrollment period for Medicare begins on November15th and runs through December 31, 2009. Insurers have been sending out their promotional material since October 1.

If you did not sign up for Medicare Part D when you were first eligible to be covered by it, you will be assessed a 1% penalty per month if and when you do sign up, unless you had creditable prescription drug coverage under another plan.

To see more about Medicare Advantage, please see our article on this topic. There are about slightly less than 11 million Medicare beneficiaries who belong to Medicare Advantage plans.

If you need assistance in making your choices you can go to the Medicare site or call or visit your State Health Insurance Assistance Program, known as SHIP, which is run by the government. Counselors provide information and help you compare plans at no charge. To find the SHIP in your state, to to www.hapnetwork.org/ship-locator.  

To see Part I of the article Medicare -Who Pays and How Much-Part I

FOR AN INFORMATIVE AND PERSONAL ARTICLE ON PRACTICAL SUGGESTIONS WHEN SELECTING A NURSING HOME SEE OUR ARTICLE "Selecting a Nursing Home"

 By Allan Rubin
updated January 26, 2010

e-mail: hrubin12@nyc.rr.com or rubin@brainlink.com

http://www.therubins.com

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