For most existing beneficiaries in 2012, the monthly Part B premium will increase only $3.50, to $99.90 from $96.40. Some more recent beneficiaries have already been paying either $115.40 or $110.50 a month, so their premiums will actually decline in 2012. In addition, the annual deductible for Part B expenses is being lowered by $22 next year, to $140 from $162.
Higher-earning beneficiaries (above $170,000 for married couples and $85,000 for individuals) pay larger premiums based on their modified adjusted gross incomes. Here, too, however, 2012 will bring lower premiums.
The increase in Part B premiums was preceded by last week’s announcement that Social Security benefits will rise by 3.6 percent in 2012 due to its annual cost of living adjustment (COLA). Low rates of inflation meant there was no COLA in either 2010 or 2011. Under the government’s “hold harmless” rules, that meant Part B premiums could not rise for existing beneficiaries. However, the premiums did increase for new beneficiaries in 2010 and 2011, and also for higher-income beneficiaries. Now, with a COLA increase in 2012, Part B premiums were permitted to rise as well, and most observers had expected larger increases than those announced. Because the premiums are paid out of monthly Social Security payments, the good news about Part B premiums is that seniors will keep most, if not all, of the 2012 COLA.