For most seniors, a small Medicare rate hike

@CNNMoney October 27, 2011: 4:12 PM ET

WASHINGTON (CNNMoney) -- Some 35 million Medicare recipients will have to dig a little deeper into their pockets when they go to the doctor next year.

Premiums for office visits and outpatient hospital services will go up by $3.50 a month, the Obama administration announced Thursday.

At the same time, 12 million recipients who had been paying higher premiums because they are recent enrollees or have higher incomes will see their monthly payments decrease by an average of $15.50 a month.

Officials with the Department of Health and Human Services were quick to note that the $3.50 increase for most seniors -- to $99.90 a month -- was "far less" than the $10 hike originally forecast for those who get the so-called Medicare Part B, which also covers home health services.

"In 2012, people will find more meaningful choices and overall lower cost," said Donald Berwick, administrator for the Centers for Medicare and Medicaid Services.

However, Medicare beneficiaries could be out a bit more if they end up in a hospital or nursing home next year. Medicare Part A -- which nearly all Medicare beneficiaries buy -- is getting a $24 annual hike in the deductible to $1,156.

The changes announced Thursday will have the biggest impact on Medicare Part B enrollees with higher incomes or who turned 65 in 2008 or later. They've been paying an average of $115.40 a month but will now pay $99.90 a month.

In addition, all Medicare Part B enrollees will see their annual deductibles fall by $22 to $140.

The reason for the divergence in premiums has to do with the Social Security cost-of-living allowance increase announced earlier this month.

Over the past few years, there has been no COLA boost, and Medicare premiums in those years have been capped at $96.40 for most seniors. The $3.50-a-month increase for earlier enrollees helps bring down the rates for those who enrolled more recently.

AARP, the lobbying group for seniors, applauded the changes.

"Millions of America's seniors are struggling with higher expenses -- particularly higher health care costs, lower incomes, depleted savings and reduced home equity or homes lost to foreclosure, and this small increase is welcome news," said AARP Legislative Policy Director David Certner in a statement.  To top of page

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