Skip to content Skip to navigation

'Medicare Stronger Than Ever,' Says Berwick

October 27, 2011
by root
| Reprints

After two years of no increases for Medicare Part B premiums, premiums for most beneficiaries premiums will go up $3.50 a month, far less than the $10 a month that was forecast.

“Because we’ve kept next year’s increase lower than the cost of living adjustment to senior social security living benefits, the typical retired worker will have nearly $40 more per month in their pocket next year,” says Kathleen Sebelius, secretary, U.S. Department of Health and Human Services (HHS).

“We are delighted with these results as Secretary Sebelius said Medicare is stronger than ever and in 2012 people with Medicare are going to find more benefits, more meaningful choices, and overall lower costs,” said Donald Berwick, M.D., administrator, Centers for Medicare & Medicaid Services, HHS.

MEDICARE PART A:
Medicare Part A be increasing by just $1 per month, and the deductible will increase by just $24. For Medicare Part A, which pays for inpatient hospital, skilled nursing facility, and some home health care, about 99 percent of Medicare beneficiaries do not pay a premium since they or their spouses 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 30 “quarters of coverage” obtain Part A coverage by paying a monthly premium set according to a statutory formula. This premium will be $451 for 2012, an increase of $1 from 2011. Those who have between 30 and 39 “quarters of coverage” may buy into Part A at a reduced monthly premium rate which is $248 for 2012, the same amount as in 2011. The Part A deductible paid by a beneficiary when admitted as a hospital inpatient will be $1,156 in 2011, an increase of $24 from this year's $1,132 deductible. The Part A deductible is the beneficiary's cost for up to 60 days of Medicare-covered inpatient hospital care in a benefit period. Beneficiaries must pay an additional $289 per day for days 61 through 90 in 2012, and $578 per day for hospital stays beyond the 90th day in a benefit period. For 2011, per day payment for days 61 through 90 was $283, and $566 for beyond 90 days. For beneficiaries in skilled nursing facilities, the daily co-insurance for days 21 through 100 in a benefit period will be $144.50 in 2012, compared to $141.50 in 2011.

MEDICARE PART B:
The standard Medicare Part B monthly premium will be $99.90 in 2012, a $15.50 decrease over the 2011 premium of $115.40. However, most Medicare beneficiaries were held harmless in 2011 and paid $96.40 per month. The 2012 premium represents a $3.50 increase for them.

Medicare Part B covers a portion of the cost of physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and other items. By law, the standard premium is set to cover one-fourth of the average cost of Part B services incurred by beneficiaries aged 65 and over, plus a contingency margin. The contingency margin is an amount to ensure that Part B has sufficient assets and income to (i) cover Part B expenditures during the year, (ii) cover incurred-but-unpaid claims costs at the end of the year, (iii) provide for possible variation between actual and projected costs, and (iv) amortize any surplus assets. Most of the remaining Part B costs are financed by Federal general revenues. (In 2012, about $2.9 billion in Part B expenditures will be financed by the fees on manufacturers and importers of brand-name prescription drugs under the Affordable Care Act.)

The largest factor affecting the contingency margin for 2012 is the current law formula for physician fees, which will result in a payment reduction of about 29 percent in 2012. For each year from 2003 through 2011, Congress has acted to prevent smaller physician fee reductions from occurring. The 2012 reduction is almost certain to be overridden by legislation enacted after Part B financing has been set for 2012. In recognition of the strong possibility of increases in Part B expenditures that would result from similar legislation to override the decrease in physician fees in 2012, it is appropriate to maintain a significantly larger Part B contingency reserve than would otherwise be necessary. The asset level projected for the end of 2012 is adequate to accommodate this contingency.

In 2012, Social Security monthly payments to enrollees will increase by 3.6 percent. The dollar increase in benefit checks is expected to be large enough on average to cover the increase in the Part B premium of $3.50 that most beneficiaries will experience. For those who were paying the standard premium of $115.40, their benefits checks will only increase.

MEDICARE PART D:
The estimate for the average 2012 Part D premium for basic coverage is $30. This is slightly lower than the actual average for 2011 of $30.76. The estimate for the average 2012 Part D premium for supplemental coverage is $8. The estimate for the average 2012 total Part D premium is $38.

MEDICARE ADVANTAGE PLANS:

On average, Medicare Advantage premiums will be 4 percent lower in 2012 than in 2011, and plans project enrollment to increase by 10 percent. Of people with Medicare, 99.7 percent continue to enjoy access to a Medicare Advantage plan, and benefits remain consistent with those offered in 2011.


Topics

News

Survey: Healthcare Reform, IT Burdens Play Key Role in Reduced Physician Morale

September 27, 2016
Across the U.S., physician morale is down, with leading contributors including regulatory/paperwork burden, dissatisfaction with electronic health records (EHRs), and doubts about the future of healthcare reform.

Study: Patient Identification Errors Can Pose a Serious Risk to Patient Safety

September 27, 2016
While most patient identification errors are caught before patients are harmed, some wrong-patient events are fatal and many have the potential to cause harm. Technology, such as bar coding, can help to prevent these errors, according to an ECRI Institute report.

Randy McCleese Wins CHIME Federal Public Policy Award for CIO Leadership

September 27, 2016
Randy McCleese, vice president of information services and CIO at St. Claire Regional Medical Center in Morehead, Ky., has been recognized as the winner of the College of Healthcare Information Management Executive’s (CHIME) Federal Public Policy Award for CIO Leadership.

USC’s Keck Medical Center Reports Ransomware Attack

September 26, 2016
The Los Angeles-based Keck Medical Center, part of the University of Southern California, has confirmed that two if its servers were hit with ransomware last month, leading to encrypted files that employees could not access.

Department of Justice Awards $8.8 Million in Grant Funding for PDMPs

September 26, 2016
In efforts to help states reduce prescription drug abuse and misuse, the U.S. Department of Justice announced it is providing close to $9 million in grants to 19 state states to help create, implement and enhance prescription drug monitoring programs (PDMPs).

Federal Leaders Release New Tools to Help Providers Better Leverage Health IT

September 26, 2016
President Barack Obama issued a message on Sept. 26 to kick off National Health IT Week, expressing optimism for where the industry stands today as well as hope for “reaching for the next frontier of innovation.”

Care New England Health System Will Pay $400,000 Settlement for Potential HIPAA Violations

September 26, 2016
Providence, R.I.-based Care New England Health System has agreed to pay $400,000 to settle potential HIPAA Privacy and Security Rules violations, stemming from a 2012 data breach at Woman and Infants Hospital of Rhode Island.

AMA Survey: Docs Bullish on Efficient Digital Health Tools

September 26, 2016
While overall physician optimism towards digital health is present across all ages, health IT tools need to be beneficial to clinical practice and not a burden, according to an American Medical Association (AMA) survey on digital health.

Survey: Cloud Technologies Helping Healthcare Organizations Improve Productivity, Efficiency

September 23, 2016
Ninety-five percent of current healthcare organization cloud infrastructure users are planning to increase their usage going forward, and among healthcare organizations not using cloud today, 58 percent of respondents said they are likely to do so in the next two years.

Study Finds Wide Variability in Effectiveness of CPOE Tools in Pediatric Hospitals

September 23, 2016
Researchers investigating the safety of CPOE systems at pediatric inpatient facilities found that while systems on average are able to intercept a majority of potential medication errors, their effectiveness varied widely among implementations.

Saint Francis Health System Acknowledges Breach, but Doesn’t Pay Ransom

September 22, 2016
Despite acknowledging that it had been the victim of a data breach involving ransomware earlier this month, the Tulsa, Okla.-based Saint Francis Health System decided not to act on the ransom demand, according to media reports.

Indian Health Service Awards $6.8 Million Contract to Avera Health for Telemedicine Services

September 22, 2016
Avera Health, a Sioux Falls, South Dakota-based health system will provide telemedicine services for seven hospitals and eight health centers within the Indian Health Service (IHS), as part of $6.8 million contract.

Provider Associations Laud Bipartisan, ACO-Focused Legislation

September 22, 2016
Four major healthcare professional associations on Thursday publicly expressed support for legislation aimed at modifying the Medicare Shared Savings Program for ACOs in order to ease providers’ concerns

AMIA Seeks Out Support for Health IT Safety Strategy, other Innovation Initiatives

September 22, 2016
The Bethesda, Md.-based American Medical Informatics Association (AMIA) took to Capitol Hill this week seeking Congressional support for a national health IT safety strategy, as well as to fund efforts such as the Precision Medicine and Cancer Moonshot Initiatives.

Dr. Mostashari Gives “Report from the Field” Inside Look on Aledade ACOs

September 21, 2016
Farzad Mostashari, M.D., founder of Aledade, a company focused on physician-led accountable care organizations (ACOs), co-published a report this week looking at the highs and lows of Medicare Shared Savings Program (MSSP) ACOs in light of recent performance results released by the government.

Pages