HHS announces lower Medicare premiums for 2012 than initially projected

Seniors' monthly Medicare premiums will be $99.90 in 2012, $6.70 less than previously projected and just $3.50 more than the premium paid this year by most beneficiaries, the Centers for Medicare and Medicaid Services announced Thursday.

CMS also said the deductible for doctors' visits will be $22 lower than this year's, while Medicare Advantage premiums should drop by 4 percent on average. The deductible for hospital and nursing home care, however, will increase by $24.

CMS Administrator Donald Berwick said the lower-than-expected premiums hike was due to two principal factors: historically low healthcare utilization rates, due in part to the healthcare reform law's investment in prevention and the 3.6 percent Social Security cost-of-living (COLA) hike announced earlier this month.

Due to the COLA adjustment, seniors won't be held harmless for Medicare premium increases as they have in recent years. As a result, the increase is lower and more evenly spread out than initially projected. 

In 2011, only about a quarter of beneficiaries — new enrollees, people with higher incomes and low-income beneficiaries whose premiums are paid by states — weren't held harmless and paid a higher premium of $115.40.

Democrats were quick to tout the news.

"Today's announcement of a lower Medicare Part B premium and deductible is welcomed news for America's seniors and people with disabilities," Rep. Pete Stark (D-Calif.), ranking member on the Ways and Means health subcommittee, said in a statement. "These reductions are a direct result of the Medicare reforms included in the Affordable Care Act – further affirmation of the positive impact health reform is already having on Americans' pocketbooks."

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