Second, for most Part B beneficiaries a “hold-harmless” provision prevents their net Social Security benefit from decreasing as a result of an increase in the Part B premium. There was no increase in Social Security benefits for 2010, and, as a result of slow growth in the CPI, this result will occur again for 2011. Consequently, the increase in the Part B premium for 2011 will be paid by only a small percentage of Part B enrollees. Approximately 27 percent of beneficiaries are not protected by the hold-harmless provision because they are subject to the income-related additional premium amount (5 percent), they are new enrollees during the year (3 percent), or they do not have their Part B premiums withheld from Social Security benefit payments (19 percent, 17 percentage points of whom qualify for both Medicare and Medicaid and have their Part B premiums paid by Medicaid).
Although Part B premiums will remain flat in 2011 for the great majority of beneficiaries, program costs will still increase significantly.  In order for Part B to be adequately funded in 2011, the 2011 contingency margin has been increased to account for this situation. However, this adjustment results in a larger-than-usual premium paid by or on behalf of a minority of Part B enrollees.  No other means is available under current law to prevent a substantial decrease in account assets, which would jeopardize the ability to pay Part B benefits.
As required in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, beginning in 2007 the Part B premium a beneficiary pays each month is based on his or her annual income.  Specifically, if a beneficiary’s “modified adjusted gross income” is greater than the legislated threshold amounts ($85,000 in 2011 for a beneficiary filing an individual income tax return or married and filing a separate return, and $170,000 for a beneficiary filing a joint tax return) the beneficiary is responsible for a larger portion of the estimated total cost of Part B benefit coverage.  In addition to the standard 25 percent premium, affected beneficiaries must pay an income-related monthly adjustment amount.  About 5 percent of current Part B enrollees are expected to be subject to the higher premium amounts.
The 2011 Part B monthly premium rates to be paid by beneficiaries who file an individual tax return (including those who are single, head of household, qualifying widow(er) with dependent child, or married filing separately who lived apart from their spouse for the entire taxable year), or who file a joint tax return are shown in the following table:
Beneficiaries who file an individual tax return with income:
Beneficiaries who file a joint tax return with income:
Part B income-related monthly adjustment amount
Total monthly Part B premium amount
Less than  or equal to $85,000
Less than or equal to $170,000
$0.00
$115.40
Greater than $85,000 and less than or equal to $107,000
Greater than $170,000 and less than or equal to $214,000
$46.10
$161.50
Greater than $107,000 and less than or equal to $160,000
Greater than $214,000 and less than or equal to $320,000
$115.30

$230.70

Greater than $160,000 and less than or equal to $214,000
Greater than $320,000 and less than or equal to $428,000
$184.50
$299.90
Greater than $214,000
Greater than $428,000
$253.70
$369.10
In addition, the monthly premium rates to be paid by beneficiaries who are married, but file a separate return from their spouse and lived with their spouse at any time during the taxable year are as follows:
Beneficiaries who are married but file a separate tax return from their spouse:
Part B income-related monthly adjustment amount
Total monthly Part B premium amount
Less than or equal to $85,000
$0.00
$115.40
Greater than $85,000 and less than or equal to $129,000
$184.50
$299.90
Greater than $129,000
$253.70
$369.10
As a result of the Medicare Modernization Act, the Part B deductible was increased to $110 in 2005 and is indexed by the annual percentage increase in the Part B actuarial rate for aged beneficiaries.  In 2011, the Part B deductible will be $162.  (The actuarial rate is set by law at one-half of the total estimated per-enrollee cost of Part B benefits and administrative expenses, adjusted as necessary to maintain an adequate contingency reserve.)