Washington, DC -- Congressman Eliot Engel (D-NY-17) said on Friday that Medicare recipients will see lower than expected premiums under Medicare Part B.  The premiums will be $99.90 per month, rather than the $106.60 projected by the U.S. Department of Health and Human Services.  In addition, the Part B deductible, which covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment and other items, will decrease by $22. 

“The Affordable Care Act is already beginning to bear fruit, and over time more and more benefits will find their way into people’s lives.  People with Medicare now also receive free preventative services and a 50 percent discount on covered prescription drugs when they enter the Medicare Part D ‘donut hole.’  In 2011, almost two million people with Medicare received cheaper prescription drugs.  For people on a fixed income, these savings have a real impact, and will continue to do so more and more as time passes,” said Rep. Engel, a senior member of the House Energy and Commerce Committee’s Subcommittee on Health.

There are four main ways where the Affordable Care Act affects Medicare beneficiary premiums:

  • Premiums for Part B physician care and other services are expected to increase at a slower rate than would have occurred in the absence of the law, resulting in lower Part B premiums over time.
  • Beneficiary co-payments and co-insurance under Parts A and B will increase more slowly because the Affordable Care Act slows the rate of growth in payments to hospitals and other providers.
  • Closing the ‘donut hole’ lowers costs for those who would have had to spent thousands of dollars out of pocket for medication.
  • The Affordable Care Act’s many preventive services to seniors, at no additional costs, reduces the costs of procedures and treatments.

“As seniors begin to see more money in their pockets, I find it disconcerting to see the House Majority’s continued fixation on repealing the Affordable Care Act and returning to a system dominated by the insurance companies.  They should be focused on putting Americans to work and addressing other areas of concern – such as the immigration system, our crumbling infrastructure and America’s public schools which are in desperate need of increased aid.  The Affordable Care Act is improving how we pay providers, get patients the care they need, and the way we spend our health care dollars,” said Rep. Engel.

The Affordable Care Act will save approximately $500 billion over the next ten years through reductions in extra subsidies paid to Medicare Advantage plans, reductions in the rate of growth in provider payments, and efforts to make the Medicare program more efficient and to reduce waste, fraud and abuse. 

The majority of people with Medicare have paid $96.40 per month for Part B since 2008, due to a law that freezes Part B premiums in years where beneficiaries do not receive cost-of-living (COLA) increases in their Social Security checks.  In 2012, these people with Medicare will pay the standard Part B premium of $99.90, amounting to a monthly change of $3.50 for most people with Medicare.  However, the 3.5 percent increase in Social Security COLA for 2012 more than offsets this amount, with an average increase of $43 a month for retired workers.