Standard Medicare Premium
Will Rise 3.1% Next Year
The Bush administration announced Monday that the standard Medicare premium would rise to $96.40 a month next year, an increase of $2.90 a month. The 3.1 percent increase is the smallest since 1999-2000, when the premium was at the same level, $45.50, for two years in a row.
Most of the 43 million beneficiaries pay the standard premium for Medicare Part B, which covers doctors’ services, outpatient hospital care, X-rays, laboratory services and other diagnostic tests.
About 5 percent of beneficiaries, with annual incomes exceeding $82,000 for individuals and $164,000 for couples filing joint tax returns, will pay higher premiums on a sliding scale.
The maximum will be $238.40 a month for the most affluent, individuals with annual incomes exceeding $205,000 and each member of a couple reporting combined income of more than $410,000. For an individual with annual income from $102,000 to $153,000, the premium will be $160.90 a month.
Most beneficiaries pay separate premiums for Medicare coverage of prescription drugs on top of the standard premium. The drug premiums typically range from $25 to $40 a month.
The increase in the standard Part B premium was less than many experts had expected, in part because officials decided to correct an accounting error. As a result of the error, money for certain hospice benefits was inadvertently drawn from the Part B trust fund rather than a separate trust fund that pays hospital costs. The money will be paid back in the coming year.
In addition, the premium for 2008 is artificially low because it assumes that Medicare payments to doctors will be cut about 10 percent next year, as required by law. Congress has usually stepped in to avert such cuts, and the cost is passed on to beneficiaries in subsequent years.
The chief Medicare actuary, Richard S. Foster, said, “The low increase in premiums is good news for 2008,” but added that it was probably a one-time phenomenon.
The annual deductible for doctors’ visits and other Part B services will be $135, up from $131. The deductible was fixed at $100 a year from 1991 to 2004. It now increases to reflect the growing average cost of Part B services for beneficiaries 65 and older.
For a beneficiary admitted to a hospital, the deductible will be $1,024 next year, up from $992.
David P. Sloane, director of government relations at AARP, the big lobby for older Americans, said increases in Medicare premiums were “eating away at the cost-of-living adjustment” made each year in Social Security checks.
As a result, Mr. Sloane said, “it is becoming more difficult for older Americans, especially those on fixed incomes, to afford their health care.”
Kerry N. Weems, acting administrator of the Centers for Medicare and Medicaid Services, said one factor contributing to the increasing premiums was an increase in payments to private Medicare Advantage plans. Beneficiaries in these plans appear, on average, to be sicker than in the past, Mr. Weems said.
NYTiemas 02.10.07
The Bush administration announced Monday that the standard Medicare premium would rise to $96.40 a month next year, an increase of $2.90 a month. The 3.1 percent increase is the smallest since 1999-2000, when the premium was at the same level, $45.50, for two years in a row.
Most of the 43 million beneficiaries pay the standard premium for Medicare Part B, which covers doctors’ services, outpatient hospital care, X-rays, laboratory services and other diagnostic tests.
About 5 percent of beneficiaries, with annual incomes exceeding $82,000 for individuals and $164,000 for couples filing joint tax returns, will pay higher premiums on a sliding scale.
The maximum will be $238.40 a month for the most affluent, individuals with annual incomes exceeding $205,000 and each member of a couple reporting combined income of more than $410,000. For an individual with annual income from $102,000 to $153,000, the premium will be $160.90 a month.
Most beneficiaries pay separate premiums for Medicare coverage of prescription drugs on top of the standard premium. The drug premiums typically range from $25 to $40 a month.
The increase in the standard Part B premium was less than many experts had expected, in part because officials decided to correct an accounting error. As a result of the error, money for certain hospice benefits was inadvertently drawn from the Part B trust fund rather than a separate trust fund that pays hospital costs. The money will be paid back in the coming year.
In addition, the premium for 2008 is artificially low because it assumes that Medicare payments to doctors will be cut about 10 percent next year, as required by law. Congress has usually stepped in to avert such cuts, and the cost is passed on to beneficiaries in subsequent years.
The chief Medicare actuary, Richard S. Foster, said, “The low increase in premiums is good news for 2008,” but added that it was probably a one-time phenomenon.
The annual deductible for doctors’ visits and other Part B services will be $135, up from $131. The deductible was fixed at $100 a year from 1991 to 2004. It now increases to reflect the growing average cost of Part B services for beneficiaries 65 and older.
For a beneficiary admitted to a hospital, the deductible will be $1,024 next year, up from $992.
David P. Sloane, director of government relations at AARP, the big lobby for older Americans, said increases in Medicare premiums were “eating away at the cost-of-living adjustment” made each year in Social Security checks.
As a result, Mr. Sloane said, “it is becoming more difficult for older Americans, especially those on fixed incomes, to afford their health care.”
Kerry N. Weems, acting administrator of the Centers for Medicare and Medicaid Services, said one factor contributing to the increasing premiums was an increase in payments to private Medicare Advantage plans. Beneficiaries in these plans appear, on average, to be sicker than in the past, Mr. Weems said.
NYTiemas 02.10.07
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