Keeping Medicare Affordable in 2012

By Kathleen Sebelius, Secretary of Health and Human Services. Crosspost from Healthcare.gov

Across the country, people with Medicare are now considering their options for 2012. Medicare’s annual Open Enrollment period opened on October 15 and closes December 7. While that seven-week period is longer than usual, it also ends on an earlier date. So seniors and people with disabilities along with their families and caregivers are examining their options and making their choices now.

The good news is there are better choices available and we’re controlling the cost of coverage. Earlier this year, we announced that premiums for Part D prescription drug coverage will remain virtually unchanged and average Medicare Advantage plan premiums will actually go down by 4 percent. That’s the second consecutive year of falling premiums for the millions of people who choose Medicare Advantage.

Today, we have more good news. Medicare’s Part B monthly premium, which helps pay for physicians’ services, outpatient hospital services, certain home health services, and other items, is rising by only $3.50 despite earlier projections of a much bigger jump.

For the last two years, the Part B premium has been frozen for most people with Medicare because their Social Security benefits were not increasing. But this year, Social Security benefits are rising 3.6 percent to cover inflation – the same percent increase as Medicare’s premium. For example, the typical retired worker will see a $39 per month increase in their Social Security check. This more than offsets the modest $3.50 change in Medicare premiums which will be the same percent of Social Security checks in 2012 as they were in 2008. In addition, Medicare’s Part B deductible will actually fall by over $20, from $161 to $140.

At the same time, Medicare is providing new benefits thanks to the Affordable Care Act. The health reform law reduces prescription drug costs for people who hit the donut hole and makes preventive benefits like cancer screenings and cholesterol tests free for everyone with Medicare. Through September 2011, nearly 20.5 million people in traditional Medicare received a free preventive service. Through August of this year, nearly 1.8 million people who hit the donut hole received these discounts, saving almost $1 billion – coming to an average of $530 per beneficiary.

Put simply, thanks to the Affordable Care Act, Medicare is providing better benefits at lower costs. Today’s announcement means seniors will have more money in their pocket. And seniors and people with disabilities are getting a Medicare program that’s stronger for today and tomorrow.