Medicare Premium, Deductible and Co-Pay Charges for 2011

The basic premium for Medicare Part B will be $115.40 a month in 2011, up from $110.50 in 2010 (a 4.4 percent increase). But because there will be no cost of living benefit increase for Social Security recipients for 2011, most beneficiaries will be exempted from paying this increase and will instead pay the same $96.40 premium amount they have paid since 2008.

A “hold-harmless” provision in the Medicare law prohibits Part B premiums from rising more than that year’s cost of living increase in Social Security benefits. Since there is no Social Security increase, most beneficiaries — about 73 percent will not have to pay any increased Part B premiums because of the hold-harmless provision. Those covered by the provision will continue to pay Part B premiums of $96.40 per month in 2011.

But this hold-harmless protection does not apply to the other 27 percent of beneficiaries — about 12 million in all who either:

• do not have their Part B premiums withheld from their Social Security checks, or
• pay a higher Part B premium surcharge based on high income (see below), or
• are newly enrolled in Part B.

All Medicare beneficiaries will be subject to the new deductibles and co- payments, as outlined below. Medicare Part B covers physician services as well as qualifying out-patient hospital care, durable medical equipment, and certain home health services, among other services.

Following are all the new Medicare figures for 2011:
Basic Part B premium:………………..$115.40/month
Part B deductible:………………………$162 (was $155)
Part A deductible:……………………….$1,132 (was $1,100)
Co-payment for hospital stay days 61-90:…………………….$283/day (was $275)
Co-payment for hospital stay days 91 and beyond:……..$566/day (was $550)
Skilled nursing facility co-payment, days 21-100:…….$141.50/day(was $137.50)

As directed by the 2003 Medicare law, higher-income beneficiaries will pay higher Part B premiums. Following are those amounts for 2011:

• Individuals with annual incomes between $85,000 and $107,000 and married couples with annual incomes between $170,000 and $214,000 will pay a monthly premium of $161.50.

• Individuals with annual incomes between $107,000 and $160,000 and married couples with annual incomes between $214,000 and $320,000 will pay a monthly premium of $230.70.

• Individuals with annual incomes between $160,000 and $214,000 and married couples with annual incomes between $320,000 and $428,000 will pay a monthly premium of $299.90.

• Individuals with annual incomes of $214,000 or more and married couples with annual incomes of $428,000 or more will pay a monthly premium of $369.10.

Rates differ for beneficiaries who are married but file a separate tax return from their spouse:

• Those with incomes between $85,000 and $129,000 will pay a monthly premium of $299.90.

• Those with incomes greater than $129,000 will pay a monthly premium of $369.10.

The Social Security Administration uses the income reported two years ago to determine a Part B beneficiary’s premiums. So the income reported on a beneficiary’s 2009 tax return is used to determine whether the beneficiary must pay a higher monthly Part B premium in 2011. Income is calculated by taking a beneficiary’s adjusted gross income and adding back in some normally excluded income, such as tax-exempt interest, U.S. savings bond interest used to pay tuition, and certain income from foreign sources. This is called modified adjusted gross income (MAGI). If a beneficiary’s MAGI decreased significantly in the past two years, she may request that information from more recent years be used to calculate the premium.

Article contributed by Carole Spainhour, Love Thornton Arnold & Thomason
PA, 410 East Washington St, Greenville, SC 29603, 864.242.7972, cspainhour@
ltatlaw.com

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