Ask the Expert: Medicare Update
We’ve read “the fine print” for you—the following updates go into effect in 2009:
Part A: Hospital Insurance
Part A pays for inpatient care at a hospital care or skilled nursing facility and some home health care.
Most individuals do not pay a monthly Part A premium because they or a spouse have 40 or more quarters of Medicare-covered employment.
Those who have 30—39 quarters of Medicare-covered employment will pay $244 per month, an increase of $11 per month from 2008.
Individuals who are not otherwise eligible for premium-free hospital insurance and have less than 30 quarters of Medicare-covered employment will pay $443 per month, an increase of $20 per month from 2008.
For each benefit period, Medicare pays all covered costs except the Medicare Part A deductible during the first 60 days and coinsurance amounts for hospital stays that last beyond 60 days and no more than 150 days. For each benefit period you pay:
* A total of $1,068 for a hospital stay of 1-60 days
* $267 per day for days 61-90 of a hospital stay
* $534 per day for days 91-150 of a hospital stay (Lifetime Reserve Days)
* All costs for each day beyond 150 days.
Individuals also have a Skilled Nursing Facility coinsurance amount of $133.50 per day for days 21 through 100 each benefit period.
Part B: Medical Insurance
Part B covers Medicare-eligible physician services, outpatient hospital services, certain home health services, and durable medical equipment. All individuals have a $135 deductible and then pay 20 percent of the Medicare-approved amount for services.
Most individuals will pay the standard monthly Part B premium of $96.40 in 2008. Some individuals will pay a higher premium based on their modified adjusted gross income.
The monthly premium will be higher if you file an individual tax return and your annual income is more than $85,000, or if you are married (file a joint tax return) and your annual income is more than $170,000.
If you meet these criteria, Social Security will use the income reported two years ago on your IRS income tax return to determine your premium. For example, the income reported on your 2007 tax return will be used to determine your monthly Part B premium in 2009.
If your income has decreased since 2007, you can ask that the income from a more recent tax year be used to determine your premium, but you must meet certain criteria.
The chart below shows the Part B monthly premium amounts based on income.
These amounts change each year. Be aware that there may be a late-enrollment penalty.
Part D: Prescription Drug Coverage
The Centers for Medicare & Medicaid Services estimates that the average monthly premium that beneficiaries will pay for standard Part D coverage in 2009 will be $28. This is about 37 percent lower than originally projected when the benefit was established in 2003.
Medicare has increased the deductible and coinsurance amounts for 2009. Individuals will pay an initial deductible of $295, an increase of $20 from 2008. The initial coverage limit (also referred to as the “donut hole”) has increased to $2,700 from $2,510. The out-of-pocket threshold has increased to $4,350 from $4,050.
Those participating in Part D programs or new participants have the opportunity to switch or select new Part D plans from November 15 — December 31, 2008.
Due to the number of people participating in these programs and the holiday season, do not wait until the end of December to make your selection because your enrollment kit may not arrive until mid-January.
these programs and the holiday season, do not wait until the end of December to make your selection because your enrollment kit may not arrive until mid-January.