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Social Security, Obamacare, Seniors and Medicare Part B - Brand New Year, Same Old Garbage

Jan 11, 2012

Did you get the Obamacare ripping off seniors email?

If anyone thought the new year would bring about a refreshing wave of truth and honesty on the Internet, well, then he is about as gullible as the people who believe the latest bit of trash that's floating around out there in cyberspace.

I'd guess about fifty of my readers sent me the following message and asked me to comment on it. Here is what the message says:

"This is another example of Obamacare ripping off seniors. The per-person Medicare (Part B) insurance premium will increase from the present monthly fee of $96.40; rising to: $104.20 in 2012; $120.20 in 2013; and $247 in 2014. These are provisions incorporated in the Obamacare legislation, purposely delayed so as not to confuse the 2012 re-election campaigns. Please send this to all seniors that you know, so they will know who's throwing them under the bus."

My regular readers know that I don't normally wade into the muddy waters of Medicare. I prefer to deal with Social Security issues. But this latest Internet whopper is so outrageously wrong that I just have to set the record straight.

I hardly know where to begin.

First, there are no proposed Part B Medicare premium increases for future years. So the premium is not set to go up to any of the amounts listed, and certainly not to the quoted "$247 in 2014."

In fact, they only recently announced the 2012 Part B premium. The basic premium for 2012 is $99.90. And that's actually a decrease compared to the 2011 premium rate of $115.40 and the 2010 premium rate of $110.50. In fact, the 2012 premium is back down near the 2009 rate, which was $96.40. And by the way, the 2012 decrease is a direct result of savings generated by the "Affordable Care Act," or what so many people like to call "Obamacare."

In other words, this latest Internet fantasy would have people believe that Obamacare is causing an increase in Part B premiums for seniors, when actually just the opposite is the case.

Do you remember earlier when I mentioned the muddy waters of Medicare? Anytime you discuss Part B premiums, you are bound to start confusing people. And that's because many people are paying different rates for their Part B coverage.

Throughout the history of the program, the basic Part B rate has gone up steadily each year -- usually by a few dollars. As I said, the "basic" rate was $96.40 in 2009, $110.50 in 2010, and $115.40 in 2011. But because there were no Social Security cost-of-living increases in 2010 and 2011, the law stipulated that a senior's Part B premium had to be held at the 2009 level of $96.40.

In other words, because many people were paying only $96.40 for Part B Medicare in 2011, they will see the 2012 rate of $99.90 as an increase. But it is actually a decrease from the "official" premium rate of $115.40. Do you see what I mean by "muddy waters?"

And it gets worse. Depending on a variety of circumstances -- such as when you went on the Medicare program, or maybe if you went off the program and then came back on -- some people actually paid the full premium of $110.50 in 2010 and $115.40 in 2011.

Oh, and it gets even muddier! There are people who are paying much higher premiums for Medicare. About 10 years ago, Congress decided that wealthier people should be charged more for their Part B coverage. I'm not even going to begin to get in the verities of these complicated rules. Suffice it to say that the richest Americans can be paying about $320 per month for Medicare. (Oh, and don't ask me to feel sorry for these folks. The government takes about $400 per month out of my civil service pension check for my health coverage. And believe me, I am nowhere near the income level of those wealthy folks paying the $320 Medicare rate!)

And that leads to an important point I need to make. I know from my emails that many seniors think the government is taking them to the cleaners when it comes to paying for Medicare. Actually, just the opposite is true.

The original Medicare Act passed in 1965 specified that the Part B premium must be set at a level to cover 25 percent of the costs of running the program. In other words, that $115.40 you should have been paying in 2011 (although most of you actually paid only $96.40) and the $99.90 you will be paying in 2012 covers only one-fourth of the costs of all the coverage you get.

Guess who picks up the rest of the tab? That's right. The taxpayers.

Now, I fully understand that many senior citizens are taxpayers, so they are part of the group helping to pay for the 75 percent of Medicare costs not paid for by the Medicare premium. But the point I am trying to make is that Part B Medicare is a heavily subsidized health insurance program and is actually quite a good deal for most American seniors.

One final point: I know many of you have questions or issues about your Part B premium. But pleasedon't send those questions to me. There is nothing I can do to help you. Instead, you should seek help from a trained Medicare counselor: one of your State Health Insurance and Advocacy Program (SHIP) coordinators. You can find out who they are at your local senior center. Or on the Web, go to Medicare.gov. Pull down the "Help and Support" menu and then click on "Useful phone numbers and websites."

If you have a Social Security question, Tom Margenau has the answer. Contact him at thomas.margenau@comcast.net.

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