Medicare Premiums and Deductibles For 2012:Medicare Part D, Advantage Plans and Income Related Adjustment

According to the Centers for Medicare & Medicaid Services (CMS) Office of Public Affairs, 2012 will be bringing in some changes to Medicare and healthcare coverage for many Americans. Do you know if, or how, you will be affected? This is the third post in our “Medicare Premiums and Deductibles For 2012” series, which can also be found at http://www.talkeldercare.com.

Medicare Part D:

The CMS estimates the average 2012 Part D premium for basic coverage is $30.  “This is slightly lower than the actual average for 2011 of $30.76,” reports the CMS. “The estimate for the average 2012 Part D premium for supplemental coverage is $8.  The estimate for the average 2012 total Part D premium is $38.”

 

Medicare Advantage Plans:

On average, Medicare Advantage premiums will be four percent lower in 2012 than in 2011, and plans project enrollment to increase by 10 percent.  Of people with Medicare, 99.7 percent continue to enjoy access to a Medicare Advantage plan, and benefits remain consistent with those offered in 2011. 

 

Income Related Adjustment:

“As required in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, beginning in 2007 the Part B premium a beneficiary pays each month is based on his or her annual income,” reported the CMS. “Specifically, if a beneficiary’s “modified adjusted gross income” is greater than the legislated threshold amounts ($85,000 in 2012 for a beneficiary filing an individual income tax return or married and filing a separate return, and $170,000 for a beneficiary filing a joint tax return) the beneficiary is responsible for a larger portion of the estimated total cost of Part B benefit coverage.”

Affected beneficiaries must pay an income-related monthly adjustment amount in addition to the standard Part B premium. These income-related amounts were phased-in over three years, beginning in 2007. Luckily, most enrollees will not be affected by the slight premium raise in 2012 – only about four percent of current Part B enrollees are expected to be subject to these higher premium amounts.

The 2012 Part B monthly premium rates to be paid by beneficiaries who file an individual tax return (including those who are single, head of household, qualifying widow(er) with dependent child, or married filing separately who lived apart from their spouse for the entire taxable year), or who file a joint tax return are shown in the following table provided by the CMS:

Beneficiaries who file an individual tax return with income: Beneficiaries who file a joint tax return with income: Part B income-related monthly adjustment amount Total monthly Part B premium amount
Less than  or equal to $85,000 Less than or equal to $170,000 $0.00 $99.90
Greater than $85,000 and less than or equal to $107,000 Greater than $170,000 and less than or equal to $214,000 $40.00 $139.90
Greater than $107,000 and less than or equal to $160,000 Greater than $214,000 and less than or equal to $320,000 $99.90 $199.80
Greater than $160,000 and less than or equal to $214,000 Greater than $320,000 and less than or equal to $428,000 $159.80 $259.70
Greater than $214,000 Greater than $428,000 $219.80 $319.70

The information provided in this post is from a recent press release from the Centers for Medicare & Medicaid Services (CMS) Office of Public Affairs.

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