MEDICARE PART B PREMIUMS ARE SCHEDULED TO RISE FOR SOME (...MAYBE)

After not rising last year, the basic premium for Medicare Part B is scheduled to raise 15 percent to $110.50 a month in 2010 for some Medicare beneficiaries. The 2009 rate is $96.40. Medicare Part B covers physician services as well as qualifying out-patient hospital care, durable medical equipment, and certain home health services, among other services.

Who has to pay the increase and who does not has not been completely sorted out. The story started when the Social Security Administration announced there would be no cost of living benefit rise for Social Security recipients in 2010. A provision in the Medicare law prohibits Part B premiums from rising more than that year's cost of living increase in Social Security benefits. Since there is no Social Security increase, most beneficiaries, about 73 percent, will not have to pay any increased Part B premiums. Those Medicare beneficiaries will continue to pay Part B premiums of $96.40 per month in 2010.

However, there is an exception in the law and some Medicare beneficiaries will see increases. The following groups (about 27 percent of Medicare beneficiaries) will see a rise in their part B premium:

1. Medicare beneficiaries that do not have Part B premiums withheld from their Social Security checks, or
2. Medicare beneficiaries that pay a Part B premium surcharge due to high income (see below), or
3. Newly enrolled Part B beneficiaries.

The U.S. House of Representatives passed a bill that would void the 15 percent Part B premium increase for all Medicare beneficiaries. Currently, this proposal is held up in the Senate. The Obama administration has urged the Senate to go along with the House.

But whether or not Congress keeps the cost of Medicare Part B level for all, other beneficiary costs of the Medicare program are scheduled to rise next year. Here are all of the new Medicare figures for 2010:

• Basic Part B premium: $110.50/month
• Part B deductible: $155 (was $135)
• Part A deductible: $1,100 (was $1,068)
• Co-payment for hospital stay days 61-90: $275/day (was $267)
• Co-payment for hospital stay days 91 and beyond: $550/day (was $534)
• Skilled nursing facility co-payment, days 21-100: $137.50/day (was $133.50)

• Individuals with annual incomes between $85,000 and $107,000 and married couples with annual incomes between $170,000 and $214,000 will pay a monthly premium of $154.70.
• Individuals with annual incomes between $107,000 and $160,000 and married couples with annual incomes between $214,000 and $320,000 will pay a monthly premium of $221.
• Individuals with annual incomes between $160,000 and $214,000 and married couples with annual incomes between $320,000 and $428,000 will pay a monthly premium of $287.30.
• Individuals with annual incomes of $214,000 or more and married couples with annual incomes of $428,000 or more will pay a monthly premium of $353.60.

Rates differ for beneficiaries who are married but file a separate tax return from their spouse:

• Those with incomes between $85,000 and $128,000 will pay a monthly premium of $287.30.
• Those with incomes greater than $128,000 will pay a monthly premium of $353.60.

The Social Security Administration uses the income reported two years ago to determine a Part B beneficiary's premiums. So the income reported on a 2008 tax return is used to determine the monthly Part B premium in 2010. Income is calculated by taking a senior's adjusted gross income and adding back in some normally excluded income, such as tax-exempt interest, U.S. savings bond interest used to pay tuition, and certain income from foreign sources. This is called modified adjusted gross income (MAGI). If a senior's MAGI decreased significantly in the past two years, he or she may request that information from more recent years be used to calculate the premium.