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Medicare Analysis: The Good and Bad News About Costs 2011 - Aging Wisely

CMS (The Centers for Medicare and Medicaid Services) has set the Medicare premiums, deductibles and coinsurance amounts to be paid by Medicare beneficiaries in 2011. See our Medicare Fact Sheet 2011 for all of the updated numbers.

The Medicare Part A deductibles all rose slightly for 2011, including the amount paid by the beneficiary when hospitalized and the coinsurance cost for Skilled Nursing. Those who enroll in Medicare Advantage plans may have different cost-sharing arrangements. All of these Part A program payment changes are determined in accordance with a statutory formula.

About 99 percent of Medicare beneficiaries do not pay a premium for Medicare Part A services since they have at least 40 quarters of Medicare-covered employment. However, some enrollees age 65 and over and certain persons with disabilities who have fewer than 40 quarters of coverage obtain Part A coverage by paying a monthly premium established according to a statutory formula. These premiums decreased slightly for 2011. Part A premiums are decreasing because spending in 2010 was lower than expected and the Affordable Care Act implemented policies that lower Part A spending due to payment efficiencies and efforts related to waste, fraud and abuse.

The monthly premium paid by beneficiaries enrolled in Medicare Part B covers a portion of the cost of physician’s services, outpatient hospital services, certain home health services, durable medical equipment, and other items. The standard Medicare Part B monthly premium will be $115.40 in 2011, a $4.90 increase (or 4.4-percent) over the 2010 premium. However, the majority of Medicare beneficiaries will continue to pay the same $96.40 premium amount they have paid since 2008 (if they are currently enrolled and have their premium deducted from their Social Security check). Part B premiums are increasing because of growth in the use of services like outpatient hospital care, home health and physician-administered drugs. According to CMS, the premium also accounts for a likely Congressional action to avert a precipitous decrease in physician payments.

In additional Medicare news, earlier this week, CMS announced that effective January 1, 2011, both the first wellness visit and subsequent annual wellness visits (free as part of Medicare’s preventative services being offered as of 2011) will include voluntary advance care planning.

As more changes come to the Medicare program, we can help with options and navigating the choices to make the best decisions for you or your loved one. Read more about our Medicare Analysis package and contact us today to schedule an appointment.

Retirement healthcare decisions can significantly impact retirement dollars. As more income-adjusted premiums are added, the impacts on higher income individuals can be significant, and we can assist clients as well as professional advisors in reviewing the effects and options.

In a previous blog post, we provided an overview of some important changes to Medicare for 2011, including open enrollment dates and additional coverage. Also, check out the EasyLiving, Inc. blog for information on Medicare Coverage and Home Health Care.

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