Medicare Update: 2011

By Attorney Amanda M. Buzo

Will My Social Security Benefit Increase in 2011?
Social Security recipients, including those receiving Supplemental Security Income (SSI), will not receive a cost of living adjustment (COLA) for 2011.  There was also no COLA for 2010.  COLA is the modification of benefits designed to keep up with inflation and is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).  Since CPI-W did not increase, there is no COLA.  What does this mean to you?  Your Social Security and SSI benefits will remain the same.  However, your Medicare Part B premium may increase unless you are one of the estimated 70% of Social Security recipients who meet the “hold harmless” provision criteria.  Additionally, you will not be affected by the increase if your Medicare Part B premium is paid by the State of Ohio through the medical assistance program (SLMB or QMB).  However, there is no similar protection for Medicare Parts C and D, and therefore those premiums may increase even when Part B premiums do not.

Will My Medicare Part B Premium Increase in 2011?
Even though Social Security benefits will not increase in 2011, your premium for Medicare Part B coverage (doctor’s visits) may increase.  The 2011 Medicare Part B premium figure has not yet been released, but it will be higher than the premium in 2010.

Your Medicare Part B premium will not increase in 2011 if all of the following apply:

  • You are entitled to Social Security benefits for November and December 2010.
  • You will have your Part B premium deducted from your Social Security benefit in December 2010 and January 2011.
  • You have not received a cost of living adjustment (COLA) that is greater than the Part B premium increase (everyone meets this requirement since no one is receiving a COLA in 2011).
  • If you are single, you do not have a modified adjusted gross income in 2011 over $85,000, or if you are married, over $170,000.

So who can expect an increase?  Your Part B premium will increase if you are a new Medicare beneficiary.  You are considered a “new” Medicare beneficiary even if you receive Social Security benefits in November and December 2010 because you will not have had Medicare premiums deducted from your Social Security checks.

Your Part B premium will increase if you directly pay your Part B premium and it is not withheld from your Social Security check or if your modified adjusted gross income is over the threshold in 2011.If you are enrolled in the state medical assistance program, known as SLMB or QMB, then the State of Ohio will continue to pay any Medicare Part B premium even if it increases.  However, if you lose your SLMB or QMB coverage, you will be required to pay the higher Part B premium.

You will also pay the higher Part B premium if you are a former Social Security Disability Insurance recipient who still qualifies for Medicare or if you are a current SSDI beneficiary who will not become eligible for Medicare until 2011 because of the 24-month waiting period.

Will My Medicare Part D Premium Increase in 2011?
The hold harmless provision that protects you from an increase in Part B premiums does not apply to Part D, the prescription drug coverage.  Therefore, it is highly likely that your premiums for Part D will increase in 2011.  If you are having financial difficulty, you may apply for the Part D Low-Income Subsidy through the Social Security Administration.  You may also be eligible for Medicare premium assistance through your county Department of Job and Family Services.

There are other changes in store for Part D in 2011.  Drug manufacturers are now required to provide beneficiaries who have reached the donut hole with a 50% discount on the plan sponsor’s negotiated price for brand-name drugs.  The cost paid by the drug manufacturers toward the negotiated price must count towards the beneficiary’s out-of-pocket threshold, which means that the full amount of the brand-name drug will be credited towards the beneficiary’s total out-of-pocket figure, even though the beneficiary paid less.  Also, the co-insurance for generic drugs while the beneficiary is in the donut hole will be reduced by 7%, to 93%.  These discounts will be applied at the pharmacy and are not available to people on the Low-Income Subsidy.

Posted in Articles, Articles: Elders and Their Caregivers.