Medicare Participants To Face 3% Increase In Monthly Premiums

Monday, October 1st 2007, 11:51 am
By: News On 6

WASHINGTON (AP) _ Elderly and disabled people will see their monthly Medicare premiums rise 3.1 percent next year to $96.40 _ the lowest increase in six years.

The good news is temporary, though.

That's because the formula used to calculate the premium assumes that physicians will take a 10 percent cut in their reimbursement rates next year, an unlikely occurrence.

The increase was lower than expected because officials fixed an accounting error that otherwise would have added $2.50 to beneficiaries' monthly premiums in 2008.

The Medicare program pays for most of the health care received by about 43 million elderly and disabled people. The program's expenses have soared in recent years as health care costs go up and as more people join the program.

Beneficiaries will be most concerned about two key expenses for next year:

First, there is Medicare Part A, which covers inpatient hospital and hospice care as well as short stays in nursing homes. For this program, participants don't pay a monthly premium. However, they do pay a deductible when they have to go to the hospital. That deductible will increase from $992 to $1024 next year.

Second, there is Medicare Part B, which covers services received at the doctor's office and in outpatient settings. The program also pays for medical equipment such as wheelchairs and oxygen tanks. About a quarter of the revenue for this program comes from beneficiaries' monthly premiums. About 95 percent of participants will pay the $96.40 premium next year, though wealthier participants will pay more.