Medicare premiums for 2011, no increase for most, but costs are not on hold

21 Oct
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Most Medicare beneficiaries will not see an increase in their Part B premium for 2011. It’s not that Medicare costs are being controlled. In fact, new benefits effective in 2011 are adding to the cost of Medicare beyond the normal growth in costs.

The fact is that the law does not allow an increase in premiums for most existing beneficiaries in years when there is no increase in the Social Security monthly benefit because of low inflation and the COLA provision in Social Security is not being triggered.

While this may seem like good news, in the long run it is not. What it means is that at some point there will be a lot of catching up to do.  If costs continue to go up and the portion of those costs paid by beneficiaries does not, who pays them?  Either they are absorbed by the Federal government or eventually they are built into future premium increases for Medicare beneficiaries. In fact, when there is a COLA, perhaps in 2012 the real premiums (reflecting three years of increases) will be spread across all Medicare beneficiaries. In the meantime, the higher costs are absorbed by the 25% on Medicare who do not receive this exemption.

There are two groups of Medicare beneficiaries who are not exempt from the COLA protection.  The first group is very low-income people on Medicaid.  In that case, the real premium increase in Part B is picked up by the state providing the Medicaid…otherwise known as cost shifting to taxpayers in the states. The second group is the folks we have all come to despise along with insurance companies, the folks who make the big bucks.  In this case it is Medicare beneficiaries with incomes over $85,000 and couples with an income over $170,000.  These folks get to pay an additional premium for Medicare Part B and are not exempt from the COLA limitation.  These beneficiaries who are required to make supplemental payments to the standard Part B premium are likely to see a significant increase for 2011, perhaps 20% or more.

Individuals who first start to receive Social Security in 2011 are also not exempt from the premium increase and will pay the actual premium reflecting Medicare costs for Part B.

5 Responses to “Medicare premiums for 2011, no increase for most, but costs are not on hold”

  1. Betty Davis December 31, 2010 at 11:15 PM #

    I think it’s a shame before God what you are doing to those of us who have worked and given of ourselves to help make this country what it is today only to be made to feel that it was all for naught. You say there was no cost of living increase so those of us who worked as civil servants are put on hold for three years as far as an increase in our pensions are concerned; however, those of us who are still breathing and able to ambulate pay the high prices at the gas pump, we haven’t stopped eating, so the groceries we buy are just as expensive as those you buy, you’ve increased our Medicare premiums, why, so that others can be covered, we have medications, for problems we are not necessarily responsible for but aging has created some of these problems, we have property taxes, State taxes, Federal taxes, you name it, we have it except the wherewithall to pay for it. President Bush almost succeeded in ridding the country of the middle class, I guess you will eventually rid the country of us old folks because there is no way in the world we can continue like this. It’s a shame before God a nation that claims to be for its people but the ones who are making out are those rich Republicans.

    • rdquinn December 31, 2010 at 11:26 PM #

      The reality is that most Americans don’t even have a pension let alone worry about a cost of living increase. Many Americans have not received a pay increase in years. You were paid for all your years of employment and paid by the taxes average Americans. Retired civil servants deserve no more than any other American.

  2. jim December 7, 2010 at 5:10 PM #

    You’ve forgotten a crucial group of people in the 1/4 of the Part B recipients who will pay all of the Part B increase because 3/4 of the Part B recipients are SS retirees with no COLAs in 2010 and 2011. The group you’ve forgotten are the millions of civil service retirees under CSRS; these are not wealthy people, and they will pay $115 per month in 2011 for the same Part B which most SS retirees pay $96 per month or less for.

    • the wizard January 16, 2011 at 7:44 PM #

      thats 19 bucks a month. $ 228yr 10 yrs $2280 25yrs $5700. what r we going to do

  3. Laurence Gillaspie November 29, 2010 at 5:24 PM #

    Coming changes to medicare health insurance will bonus some recipients – but will help make coverage more expensive for those who have higher incomes. Thanks in part to the following year’s health-care modernize, everything from benefits and additionally enrollment guidelines to the options available shall be affected starting point Jan. 1.


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