Premiums and Coinsurance for 2011

supplemental health insurance

Medicare premiums and coinsurance rates change annually and may apply separately to Medicare Part A, Medicare Part B, and Medicare Part D coverage. Medicare Advantage Plans (also know as Medicare Part C) may also have separate monthly premiums associated with the different plans. Medicare copayment can include: flat-fee copayments for doctors’ visits, per day fees for hospital stays and skilled nursing facility care, and/or coinsurance rates for particular medical services, such as chemotherapy, labs, and/or x-rays and other imaging techniques.

Medicare Premiums

Medicare Part A (Hospital Insurance) pays for inpatient hospital stays, skilled nursing facility care, and some home health care. As reported by the Centers for Medicare & Medicaid Services, approximately 99% of people receiving Medicare benefits do not have to pay Medicare premiums on Part A, because they (or their spouses) have over 40 quarters of Medicare-covered employment. For the small percentage of people who do have to pay Medicare premiums, the amount per month depends on the number of quarters of Medicare-covered employment the person (or his/her spouse) has. People with 30 to 39 quarters of Medicare-covered employment will pay a reduced monthly premium of $248 in 2011. For people who do not have at least 30 quarters of Medicare-covered employment and are not eligible for free or reduced Medicare premiums for any other reason, the monthly premium in 2011 for Medicare Part A will be $450, which is $11 less than the 2010 premiums.

Medicare Part B (Medical Insurance) pays for physician services, outpatient hospital services, certain home health services, and durable medical equipment. People already on Medicare who have their Medicare premiums withheld by the Social Security Administration and have annual household incomes of less than $85,000 for single filers or less than $170,000 for couples who file jointly will not see an increase in their monthly premiums. (The monthly rate will stay the same, $96.40 or $110.50, as in previous years.) People who have the same annual household incomes as those listed above (less than $85,000 for single filers or $170,000 for joint filers) but who do not have the Social Security Administration withhold their monthly premiums will see their monthly premiums for Medicare Part B increase $4.90 to $115.40 in 2011. (This is a 4.4% increase over 2010.) Those people on Medicare who make more than $85,000 as a single filer or $170,000 jointly will see a greater increase in their monthly Medicare premiums. These premiums will be figured on a sliding scale depending on annual household income and will start at $161.50 per month.

As reported by The Centers for Medicare & Medicaid Services, the 2011 Medicare premiums for Part D (prescription drug coverage) should remain similar to the 2010 rates. Information obtained by the CMS from providers so far indicates that monthly Medicare premiums for Part D will likely be $30 per month on average. Some plans, such as Medicare Advantage Plans, may feature higher or lower monthly premiums for prescription drug coverage. For more information about specific Medicare Advantage Plans, contact the plan provider directly.

Medicare Copayment, Coinsurance and Deductibles

Medicare Part A pays all covered hospital, skilled nursing facility and home health care benefits for each benefit period except for the deductible. For 2011, the deductible is $1,132 for any hospital stay 60 days long or less. For any hospital stay lasting longer than 60 days, a Medicare copayment will apply. For stays lasting 61 to 90 days, you will have to pay a Medicare copayment of $283 per day. For stays of 91 to 150 days, you will have to pay $566 per day. For any hospital stay that lasts longer than 150 days within a single benefit period, you will be required to pay the full cost for each day after the 150th day. For people on Medicare who receive care in a skilled nursing facility, a Medicare copayment of $141.50 per day will apply to days 21 through 100. Medicare will cover days 1 through 20 in full. You will be required to pay in full any days after the 100th day.

Medicare Part B includes a yearly deductible of $162 in 2011. This deductible will be applied to health care costs that involve physician services, outpatient hospital services, certain home health services, and durable medical equipment. Once the deductible is met, you will be required to pay only 20% of the Medicare-approved amount charged by providers for your health care services. In 2011, because of the new health care law, many preventive services will be provided at no cost to you. These free benefits will not be affected by the deductible.

The annual deductible for Medicare Part D will remain $310 in 2011. With regard to Medicare copayment rates, changes included in the new health care law will mean cost-savings for many people during the doughnut hole period. People with Part D coverage will be eligible for a 50% savings on the full retail cost of brand name drugs during the doughnut hole period. Future years will offer additional cost-saving changes.

Medicare Advantage Plans may have different Medicare premiums, copayments, coinsurance, and deductibles than are listed here. For more information on the 2011 premiums and coinsurance associated with your plan, please contact your Medicare Advantage Plan directly.

Some people with limited income may be eligible for additional help with their Medicare costs. Many states have programs that will pay some of your Medicare premiums and/or Medicare copayment depending on your income. For additional information, visit www.medicare.gov or call 1-800-MEDICARE (1-800-633-4227).