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The Medicare Alphabet

 

October 28, 2011

Whether or not you are on Medicare, it is important now to get a handle on some of the terms which that government program uses.  Medicare beneficiaries can be involved in Medicare part A, Part B, Part C and Part D – plus, if they happen to have a Medigap policy, there are additional letters they need to know about.

Concentrating on the first four, there are some recent developments of great interest to Medicare beneficiaries.

Most people on Medicare have Part A which covers Hospital care essentially and pay no specific premium for that coverage.

However, Part B of Medicare is Health Insurance for medical expenses out of hospital – and last year the majority of Medicare beneficiaries paid a monthly premium of $96.40 which was automatically deducted from their monthly Social Security check.  Because there has been no cost-of-living increase in Social Security monthly income benefits for the last few years, by law, that Part B premium was not allowed to increase. (This was a kind of quirk in the way the law was written.)

Recently, the public was informed that for 2012 there is to be a 3.6 percent increase in monthly payments to Social Security enrollees. Consequently, most people expected that the lower Part B premium was to be a thing of the past, and everybody would be paying the $115.40 premium that recent enrollees have been paying each month.

The government has now announced that the 2012 Part B premium is to be $99.90 a month – for all beneficiaries!  That means that older beneficiaries will have an increase of only $3.50 per month – probably much less than the increased monthly income.   Part B recipients who’ve been paying the full $115.40 will actually get a REDUCTION to $99.90 – a monthly savings of $15.50.  (This is largely due to the provisions of the Affordable Care Act.)

Part C, as it is called, refers to Medicare health Plans – typically HMOs or PPOs, and are known as Medicare Advantage Plans (MA).  On average, MA 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.

In some areas, however, there will be a more limited choice of available MA plans, so Medicare beneficiaries are advised to seek counseling – typically from local Agencies on Aging.  Beneficiaries in Virginia can call 1-800-491-0762 to locate free Medicare counseling. This number will connect to the commonwealth’s Senior Health Insurance Program (“SHIP”) which is called VICAP in Virginia.

Part D – Drug coverage. 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 is $38.

Again, because of many changes to plan premiums and formularies, Part D holders should closely compare their current plan to what will be available in 2012.  The Medicare Plan Finder at Medicare.gov can be very helpful – but again, beneficiaries are urged to seek counseling from a VICAP or SHIP counselor.