Are You Sitting Down? Medicare Premium to Remain Unchanged in 2009

For the first time in eight years, Medicare’s monthly premium will remain unchanged for most of the program’s 44 million beneficiaries. The Centers for Medicare and Medicaid Services (CMS) announced that the Part B premium will remain at its 2008 level of $96.40 for 2009 for individuals earning $85,000 or less or couples earning $170,000 or less. The premium will go up for higher earners (see list below). The Part B deductible will remain at its 2008 level as well.

The monthly premium paid by beneficiaries enrolled in 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.

This is only the sixth time since Medicare was created in 1965 that the Part B premium stayed the same for two consecutive years, said Richard Foster, Medicare’s chief actuary.

Anticipating concerns, Foster, who has worked for the agency since the early 1970s, said “There is no political manipulation.” The premium will hold steady in part because Medicare’s reserves have increased, according to a CMS statement. Foster said monthly rates are likely to go up in 2010 as health costs continue to rise.

AARP warned in a statement that “Lawmakers should not use today’s announcement as an excuse to rest. The average 73-year-old in Medicare has seen his or her premium double since joining the program. Americans old and young continue to struggle with skyrocketing health-care costs.” (For example, a recent analysis found that the average monthly premium for stand-alone Medicare prescription drug coverage will increase by 24 percent to $37 next year.)

While the Part B premium and deductible will not rise, other Medicare deductibles and co-payments will. Here are all the new Medicare figures for 2009:
Basic Part B premium: $96.40/month (unchanged)
Part B deductible: $135 (unchanged)
Part A deductible: $1,068 (was $1,024)
Co-payment for hospital stay days 61-90: $267/day (was $256)
Co-payment for hospital stay days 91 and beyond: $534/day (was $512)
Skilled nursing facility co-payment, days 21-100: $133.50/day (was $128)
As directed by the 2003 Medicare law, higher-income beneficiaries will pay higher Part B premiums. About 5 percent of current Part B enrollees are expected to be subject to the higher premium amounts. Following are those amounts for 2009:
Individuals with annual incomes between $85,000 and $107,000 and married couples with annual incomes between $170,000 and $214,000 in 2009 will pay a monthly premium of $134.90
Individuals with annual incomes between $107,000 and $160,000 and married couples with annual incomes between $214,000 and $320,000 in 2009 will pay a monthly premium of $192.70
Individuals with annual incomes between $160,000 and $213,000 and married couples with annual incomes between $320,000 and $426,000 in 2009 will pay a monthly premium of $250.50
Individuals with annual incomes of $213,000 or more and married couples with annual incomes of $426,000 or more in 2009 will pay a monthly premium of $308.30
Rates differ for beneficiaries who are married but file a separate tax return from their spouse:
Those with incomes between $85,000 and $128,000 will pay a monthly premium of $250.50
Those with incomes greater than $128,000 will pay a monthly premium of $308.30
Source: Medicare