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

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
View rates in your area
Find personalized rates:
Economic Calendar
Latest ReportNext Update
Home pricesAug 28
Consumer confidenceAug 28
GDPAug 29
Manufacturing (ISM)Sept 4
JobsSept 7
Inflation (CPI)Sept 14
Retail sales Sept 14
  • -->

    Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.