Johanna Quaas, 86-Year-Old Gymnast, Performs At Cottbus World Cup In Germany
Rise in Medicare Premiums Less Than Feared in 2012
Rise in Medicare Premiums Less Than Feared in 2012
By The Associated Press Posted 1:30PM 10/27/11 Health Care
WASHINGTON (AP) – Good news for seniors: The government says Medicare’s basic monthly premium will rise less than expected next year, by $3.50 for most.
It could be good, too, for President Barack Obama and Democrats struggling for older Americans’ votes in a close election.
At $99.90 per month, the 2012 Part B premium for outpatient care will be about $7 less than projected as recently as May. The additional money that most seniors will pay works out to about 10 percent of the average Social Security cost-of-living increase they’ll also be due.
Some recently enrolled younger retirees will actually pay less. They were charged $115.40 a month this year, and they’ll see that go down to $99.90.
The main reason for lower-than-expected premiums seems to be the connection between Social Security COLAs and Medicare. Some also cite a moderation in health care costs.
But the Obama administration is hoping seniors will get a simpler takeaway message: Medicare is under sound management.
Older voters went for Republicans in the 2010 elections, after Obama’s health care overhaul law cut Medicare spending to help finance coverage for the uninsured. Since then, the administration has worked hard to reverse any perception that Obama is steering Medicare into decline.
Health and Human Services Secretary Kathleen Sebelius said it’s “pretty remarkable” that premiums will stay in check. She reassured seniors that they have nothing to fear from the health care law.
“Thanks to the Affordable Care Act, Medicare is providing better benefits at lower cost,” said Sebelius.
Republicans weren’t buying it.
A spokeswoman for Sen. Orrin Hatch of Utah said the brunt of the health law’s Medicare cuts are still to come. “More importantly,” added Antonia Ferrier, “lower Medicare premiums are being driven by lower than average Medicare spending due to the slow economy” – not the health care law. Hatch is the ranking Republican on the Senate panel overseeing Medicare.
A spokeswoman for House Ways and Means Chairman Dave Camp, R-Mich., said premiums are more affordable because seniors on tight budgets are spending less on health care in a troubled economy.
Medicare’s Part B annual deductible, the amount beneficiaries pay before their coverage begins, will also drop next year to $140, a decrease of $22. The hospital deductible, however, will increase by $24, to $1,156, for those admitted as inpatients. One doesn’t cancel out the other since a minority of beneficiaries are hospitalized in any given year.
AARP, the seniors lobby, reacted warily to Thursday’s announcement. Policy director David Certner said there’s still a chance Congress could cut Medicare and Social Security as part of a budget deal. “These changes would far outweigh today’s good news,” he said.
For the average retiree, the Medicare news means they will have to fork over only a small part of a long-awaited Social Security increase next year for premiums.
Premiums have been frozen at the 2008 level of $96.40 a month for about three-fourths of Medicare beneficiaries. That was due to the lack of a Social Security COLA during the depths of the economic downturn. But Social Security recently announced a raise averaging $39 a month for 2012.
The Part B premium is one number that most of the 48 million people on Medicare can connect with. Average premiums for prescription coverage and for popular Medicare Advantage plans will stay flat or dip slightly for 2012, but fewer beneficiaries opt for those benefits.
A leading nonpartisan expert on Medicare said she doubted election-year politics were behind the lower-than-expected premiums for 2012.
“Changes in premiums are obviously important to seniors, but the numbers are based on what the law requires and determined by independent actuaries rather than politics,” said Tricia Neuman of the Kaiser Family Foundation.
Neuman said the explanation probably concerns the relationship between Medicare premiums and Social Security cost of living adjustments.
By law, the Part B premium is set to cover 25 percent of the cost of Medicare’s outpatient care benefit.
But premiums have been frozen for most beneficiaries because federal law also says that an individual’s Medicare premium cannot go up more than his Social Security COLA, with some exceptions.
That left a relatively small share of beneficiaries, including recent enrollees, bearing the brunt of higher Medicare costs. Indeed, the “standard premium” for 2011 rose to $115.40, and new enrollees were charged that amount. Upper-income retirees pay even more, but premiums for the poor are covered by Medicaid.
Back in May, government experts were forecasting a Medicare a premium of $106.60 for 2012. At that time, they were also projecting a Social Security COLA of just 0.7 percent. But the final COLA increase turned out to be much bigger, a 3.6 percent raise. And that meant rising Medicare costs could be spread among many more people, resulting in smaller individual increases.
“More people are sharing the smaller-than-expected increase, so that is spread over a larger number of people,” said Medicare chief Don Berwick. Administration officials say they’ve also seen a slow-down in the use of health care services throughout the economy, not just among seniors.
___
Associated Press writer Stephen Ohlemacher contributed to this report
See full article from DailyFinance: http://srph.it/sPJ6NU
Social Security to Hand Out First Raises Since ’09
WASHINGTON – Some 55 million Social Security recipients will get a 3.6 percent increase in benefits next year, their first raise since 2009, the government announced Wednesday.
The increase, which starts in January, is tied to a measure of inflation released Wednesday morning.
About 8 million people who receive Supplemental Security Income will also receive the 3.6 percent cost-of-living adjustment, or COLA, meaning the announcement will affect about one in five U.S. residents.
There was no COLA in 2010 or 2011 because inflation was too low. Those were the first two years without a COLA since automatic increases were adopted in 1975. However, Social Security recipients did receive a one-time $250 payment from the economic stimulus package passed in 2009.
Monthly Social Security payments average $1,082, or about $13,000 a year. A 3.6 percent increase will amount to about $39 a month, or just over $467 a year, on average.
Advocates for seniors said the raise will provide a much-needed boost to the millions of retirees and disabled people who have seen retirement accounts dwindle and home values drop during the economic downturn. Economists say the increase should provide a modest boost to consumer spending, which should help the economy.
Still, many seniors feel like they have been falling behind.
Nancy Altman, co-chair of the Strengthen Social Security Campaign, said she is pleased Social Security recipients will get a raise next year. But, she added, “The COLA is still not enough to keep up with health care costs.”
“Despite the absence of a Social Security COLA, over the last two years out-of-pocket health care costs rose 14.1 percent for seniors and people with disabilities, effectively reducing the value of Social Security benefits,” Altman said.
Most retirees rely on Social Security for a majority of their income, according to the Social Security Administration. Many rely on it for more than 90 percent of their income.
“For many of our seniors, the creeping costs of medical care, food and housing have forced them to stretch their limited incomes to the breaking point,” said Rep. Xavier Becerra of California, the top Democrat on the House Social Security subcommittee. “And after two years without any cost-of-living increases, our seniors are getting some much-needed relief.”
Some of the increase in January will be lost to higher Medicare premiums, which are deducted from Social Security payments. Medicare Part B premiums for 2012 are expected to be announced next week, and the trustees who oversee the program are projecting an increase.
The amount of wages subject to Social Security taxes will also go up next year. This year, the first $106,800 in wages is subject to Social Security payroll taxes. Next year, the limit will increase to $110,100, the Social Security Administration said.
Of the 161 million workers who will pay Social Security taxes next year, about 10 million will get a tax increase from the change, the agency said.
Workers pay a 6.2 percent Social Security tax on wages, which is matched by employers. For 2011, the tax rate for workers was reduced to 4.2 percent. The tax cut is scheduled to expire at the end of the year, though President Barack Obama wants to expand it and extend it for another year.
Several economists said the Social Security increase should provide a modest boost in consumer spending next year. However, David Wyss, former chief economist at Standard & Poor’s, noted that most analysts have already factored the COLA into their growth estimates for next year.
“The COLA will help the economy a bit,” Wyss said. “At least, it is moving in the right direction. But it is not a game-changer.”
Federal law requires the program to base annual payment increases on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Officials compare inflation in the third quarter of each year – the months of July, August and September – with the same months in the previous year.
If consumer prices increase from year to year, Social Security recipients automatically get higher payments, starting the following January. If price changes are negative, the payments stay unchanged.
Social Security payments increased by 5.8 percent in 2009, the largest increase in 27 years, after energy prices spiked in 2008. But energy prices quickly dropped and home prices became soft in markets across the country, contributing to lower inflation in the past two years.
As a result, Social Security recipients got an increase that was far larger than actual overall inflation.
However, they can’t get another increase until consumer prices exceed the levels measured in 2008. Wednesday’s announcement shows that prices have exceeded those measured in 2008, said Polina Vlasenko, an economist at the American Institute for Economic Research, based in Great Barrington, Mass.
Wednesday’s COLA announcement comes as a special joint committee of Congress weighs options to reduce the federal government’s $1.3 trillion budget deficit. In talks this summer, Obama floated the idea of adopting a new measure of inflation to calculate the COLA, one that would reduce the annual increases.
Advocates for seniors mounted an aggressive campaign against the proposal, and it was scrapped. But it could resurface in the ongoing talks.
“The relief expressed by many should serve as a reminder about how important the COLA is – the difference between filling a prescription, cutting back on food or turning the heat up during a cold spell,” said Eric Kingson, co-director of Social Security Works, an advocacy group. “It also should remind those politicians who are talking about cutting all future COLAs that they are playing with fire, the lives of fellow Americans and their own political futures.”
See full article from DailyFinance: http://srph.it/oymqGq
How to make it!
At 100 years old, Ruth knows the secret to living a long, beautiful life. She lifts weights, does her exercises and practices Pilates at least once a week (an activity she started 8 years ago). When I came to visit Ruth in her lovely apartment, the first thing she told me was to excuse the mess, but she had been doing stretches on her mat before I arrived. I asked Ruth about her life and style secrets and the key to staying vital and youthful at an older age. Check out Ruth’s tips and for more of her wonderful life lessons check out the video above.
Ruth’s Life and Style Advice
- “I make myself go out everyday, even if it’s only to walk around the block. The key to staying young is to keep moving.”
- “Invest in quality pieces, they never go out of style.”
- “Don’t look at the calendar, just keep celebrating everyday.”
- “I dress up everyday and I don’t wear blue jeans.”
- Take care of your skin. Make sure and moisturize, inspired by Elizabeth Arden, “If you want to look like this when you are 40 start when you are 20.”
Hello world!
Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!
