Medicare Part B Premium and Social Security COLA for 2012

14 Oct

I am going out on a bit of a limb here, so remember this is not all final. I have been reviewing a variety of sources and it appears that for 2012:

The Medicare Part B premium will be about $106.60, a 10.6% increase over the current premium for hold harmless beneficiaries at $96.40. This also means that those Medicare beneficiaries who are paying more than $106.60 will see a decrease in their monthly premium. Why such an apparent modest increase? Because now, given there will be a Social Security COLA, all beneficiaries are in the pool to offset the costs of Part B, not just the 25% who have not had their premium frozen for the last several years.

Given we are still looking for about a 3.5% increase in Social Security benefits, you can now do the math and see what your net increase in monthly Social Security is likely to be.  For example, let’s say your benefit is $1,000.  A 3.5% increase gives you $1,035 less the increase in Part B of $10.20 for a net new benefit of $1,024.8 or a net percentage increase of 2.48%.

If I am right in all this, you can send flowers.  If I am wrong, I will run for President and blame someone else.

3 Responses to “Medicare Part B Premium and Social Security COLA for 2012”

  1. dennis byron October 18, 2011 at 1:20 PM #

    I haven’t seen this confirmed by any government source but what you say is being reported by Reuters.

    However, if Reuters is correct, it is not true that all people paying more than $106.xx will pay less. Only those who signed up for Medicare in 2010 and 2011 and who are paying $110.xx or $115.xx now will pay less. Those that are paying from $169.xx up to $369.xx for their Medicare this year (because they make more than $85,000), no matter what year they signed up, will pay less but they will not pay $106.xx.

    • rdquinn October 18, 2011 at 1:46 PM #

      You are partially correct. Those high income people pay the basic premium plus an additional amount based on income. However, if the base amount drops from $110 to $106 so will their base. But, of course, they will still pay considerably more than $106 or whatever the basic Part B premium may be.


      Richard D Quinn Editor



  1. Medicare Part B premium increase in 2012 likely to fully offset Social Security COLA projected at 1.2%. This is a good lesson for anyone planning on retiring. « quinnscommentary - October 16, 2011

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