Wednesday, November 17, 2010

Medicare Premiums Headed North

FoIB Roger D sent us some very interesting information regarding 2011 Medicare premiums and benefits. To review, Medicare Part A covers hospital expenses, and is subject to an annual deductible. Starting in January, that cost goes up to $1132, an increase of some 3%. While that may not seem like a big hit, keep in mind that a lot of seniors will see no offsetting increase in their Social Security checks.

Part B, which covers non-hospital expenses, will cost $115.40 per month in 2011 for those going on Medicare for the first time, but the premium will remain the same for those currently on Medicare ($96.40 for most folks). Here's where it gets strange: according to Mercer Grist (an international HR consulting firm), CMS is using a little-known "twist" in the law to delay increases for certain beneficiaries.

It works like this:

Medicare rules prohibit year-to-year Social Security benefits reductions that are deemed to have been a result of increased Part B premiums. Since Social Security benefits are flat from this year to next, this law effectively "freezes" Part B premiums for these beneficiaries. That's actually a good thing (for them); otherwise, they'd end up with another unanticipated tax (the increased premium).

Of course, those seniors who don't fall under the benefits of that little "tweak" will see their premiums go up. Nice.

Part D (for "Debacle") is also undergoing some growing pains: premiums for higher income beneficiaries are going up. Call it a "tax on the successful," which of course it is. It's a nice little sleight-of-hand, too: the "success tax" is deducted from its victims' Social Security check and walked down the hall to HHS Secretary Shecantbeserious's office.

What a system!
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