YOUR HEALTH INSURANCE

In 2009 the premium for Medicare Part B did not go up. I am sorry to tell you that for 2010, the premium is going up, even though your social security checks will not see an increase. Premium is based on income and if you are single and your income is $85,000 or less your premium will be $110.50 per month (instead of the $96.40 you paid in 2009).

For beneficiaries filing a joint tax return, if your income is less than or equal to $170,000, you will each pay $110.50 monthly. There is a sliding scale based on income; the higher your income, the higher your premium. If you file an individual tax return and your income is greater than $85,000 and less than or equal to $107,000, the new premium will be $154.70. This premium also applies to beneficiaries who file a joint return with income greater than $170,000 and less than or equal to $214,000. For additional premium information for higher incomes you are welcome to call our office. Some of you have already received the 2010 MEDICARE AND YOU handbook. If so, you will find the premium chart in this booklet.
The Medicare Part A (hospital bill) deductible will be going up from $1,068 to $1,100. This is not per calendar year. If you are out of the hospital for 60 or more days, and then are readmitted, you get charged with the deductible again. If you are readmitted within 60 days, you do not get charged for the deductible again.

The Part B deductible (medical expenses) is going up from $135 to $155 per calendar year.

If you have traditional Medicare and are not eligible for group health insurance from a former employer, chances are that you have a Medicare supplement policy, also known as a Medigap policy. Some of you have been calling us already because you have heard that Plan J, the richest Medigap policy on the market, will be discontinued. That is true. This favorite Medigap policy will no longer be offered after June 1, 2010. However, if you have the policy you can continue to keep it, so long as you pay the premium. Eventually, this policy may be too expensive to continue because as people opt for a less expensive Medigap policy and as Plan J recipients drop out or die, there will be fewer and fewer (and older and older) people with Plan J. This will, of course, drive up the premium.

Not only will Plan J be taken off the market but also Plans E, H, and I. This isn't too disconcerting. Plan C is the minimum coverage we would recommend to anyone and Plan F is a very popular plan giving you 100 percent coverage after Medicare. These two plans will still be available. In addition, the government is adding plans M and N. I do not know if these two plans will be available in New Jersey, nor do I know the approximate cost, at this time. Plan M only pays half of the Part A deductible when you are admitted to a hospital. Plan N will have a co-payment of $20 for every office visit and up to a $50 co-payment for an emergency room visit. Plans K and L also offer limited benefits but have not been available for sale in NJ. While the federal government designs the Medigap policies, it is up to the State Insurance Commissioner to determine which of the plans will be sold in his/her state. In NJ, we have had Plans A through J available for sale.

The changes in Medigap plans listed above do not become effective until June 1, 2010 so you can purchase Plan J until that date, if you wish. As more information becomes available, we will share it with you in this column.