Medicare


Reprieve on Medicare B

Health costs continue to rise, but the majority of Medicare beneficiaries won't see an increase in their Part B premiums in 2010. Nearly 75% will continue to pay $96.40 per month for Medicare-covered doctor visits and outpatient services, thanks to a "hold harmless" provision that prevents Social Security checks from declining from one year to the next. Most people have their Part B premiums deducted from their Social Security checks. Because there will be no cost-of-living increase in benefits in 2010, their Medicare Part B premiums can't rise, either.

However, the hold-harmless provision does not apply to about one-fourth of Medicare beneficiaries: people who are new to Medicare in 2010, low-income beneficiaries whose premiums are paid by Medicaid and high-income beneficiaries who pay a surcharge. For most of them, premiums could increase substantially, jumping by $14.10, to $110.50 a month, in 2010, according to the Centers for Medicare & Medicaid Services. The hike is so large because those not protected by the hold-harmless provision must bear the entire burden of the increased cost.

But high-income beneficiaries will pay even more than that. That's been the case since 2007, when income surcharges were added to Part B premiums for people above a certain income level (see the table).

Congress is considering legislation that would freeze Medicare Part B premiums at 2009 levels for everyone in 2010 -- even those who aren't protected by the hold-harmless provision. High-income beneficiaries would still have to pay a surcharge, but their total costs would remain at 2009 levels (ranging from $134.90 to $308.30 per month, depending on income).

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Although the House has approved the legislation, the Senate has yet to act and may miss the deadline for programming computers in time to allow any last-minute changes to January benefit checks.


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