Medicare Part B premiums in 2012 will be more than 6 percent less than was projected earlier this year by the Medicare Trustees.
Premiums for 2012 will be $99.90 per month instead of the $106.60 projected by the trustees and the deductible for 2012 will also decrease by $22 to $140. In addition, roughly 12 million seniors who have been paying a higher monthly rate of $115.40 per month due to having a higher income or who have joined Medicare since 2008 will also pay $99.90 per month for a savings of $15.50.
"The Affordable Care Act is helping to keep Medicare strong and affordable," said HHS Secretary Kathleen Sebelius in a press release. "People with Medicare are seeing higher quality benefits, better healthcare choices and lower costs."
Overall, the majority of beneficiaries with Part B will see a small increase in their monthly premiums of $3.50 per month, their first increase in premiums since 2008. Under federal law, Medicare Part B premiums cannot rise during years in which Social Security does not provide a yearly cost of living (COLA) increase.
In early October, the Administration announced retirees would receive 3.6 percent COLA hike in their Social Security checks, the first such increase since the beginning of the economic downturn. As a result, most Part B beneficiaries will receive more than enough money to offset the slight increase in Part B premiums, as the average COLA increase will by roughly $43 per month.
"Thanks in part to the Affordable Care Act, people with Medicare are going to have more money in their pockets next year," added Donald Berwick, MD, administrator of the Centers for Medicare & Medicaid Services. "With new tools provided by the Affordable Care Act, we are improving how we pay providers, helping patients get the care they need and spending our healthcare dollars more wisely."
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Congressional Democrats and organizations advocating for seniors were pleased with the news.
"The payment reforms enacted over the past few years, including those in the Affordable Care Act, in addition to crackdowns on fraud, waste and abuse, are partially responsible for the increased optimism about Medicare's financial health, the lower-than-predicted Part B premium and an almost unheard-of drop in the Part B deductible," said Joe Baker, president of New York-based Center for Medicare Rights, in a prepared statement. "These developments help show the promise of the ACA's delivery system reforms, and why we must let them do their job in the coming years."
Rep. Pete Starkef="/directory/stark-law-physician-self-referral-law" target="_blank" class="directory-item-link">Stark (D-CA), ranking member on the House Ways and Means Health Subcommittee added: "These reductions are a direct result of the Medicare reforms included in the Affordable Care Act – further affirmation of the positive impact health reform is already having on Americans' pocketbooks. Paired with last week's announcement that Social Security beneficiaries will see a cost-of-living adjustment in 2012, people will finally be getting some economic relief."
The AARP also chimed in.
"Millions of America's seniors are struggling with higher expenses - particularly higher healthcare costs, lower incomes, depleted savings and reduced home equity or homes lost to foreclosure, and this small increase is welcome news," read a statement from David Certner, AARP's legislative policy director.