Medicare premiums increase less than expected for most elderly people

Tuesday, September 12th 2006, 2:37 pm

By: News On 6

WASHINGTON (AP) _ Most elderly and disabled people on Medicare will see their premiums rise to $93.50 a month next year, a 5.6 percent increase that is much lower than had been anticipated.

Officials had been projecting that premiums would again grow at double-digit rates, but there has been an unexpected slowing in the volume of services and tests that doctors are ordering for their Medicare patients.

The news was not as good for wealthier beneficiaries. For the first time in the program's history, wealthier beneficiaries will pay more for the insurance that covers doctors' visits and outpatient hospital care, known as Medicare Part B.

The higher payments will apply to about 1.5 million beneficiaries with incomes of more than $80,000 a year. Congress approved means-testing in the 2003 law that created the Medicare drug benefit.

For individuals who earn more than $80,000, or couples who earn more than $160,000, premiums will jump to $106. That amount goes up even more for seniors with higher incomes. For the wealthiest seniors, the monthly premium would go to $162, leading some analysts to project that wealthier and often healthier seniors would begin to leave the program.