Part B Premiums Won�t Go Up

Despite a continuing rise in healthcare costs, most Medicare beneficiaries will catch a break next year, as the premium for their Part B coverage will stay the same, at $96.40 a month. According to CMS officials, this is the first time since 2000 and only the sixth time ever that premiums have not gone up from year to year. The Part B deductible will also remain the same at $135.

Premium increases track higher costs and, although both medical costs and the anticipated demand for health services will almost certainly go up next year, the increases will be offset by a $9.3 billion addition to the reserves in the Part B trust fund. The money was restored to the fund after officials discovered that it was “inadvertently” used to pay for hospice benefits that should have been covered under Part A. CMS officials also warned that the 1-year respite from premium increases is not likely to happen again soon. In future years, CMS will most likely need to raise Part B premiums in lockstep with rising costs.

About 95% of those covered under Medicare will pay the standard $96.40 monthly premium. Beginning in 2007, higher-income beneficiaries started paying income-adjusted Part B premiums, which are being phased in over a 3-year period. 2009 will be the first year in which these Part B enrollees will pay the full amount of the income-related premiums. Individuals with a modified adjusted gross income (MAGI) of more than $85,000 a year and couples with an MAGI of more than $170,000 will pay premiums ranging from $104.90 to $308.40, depending on their income.