Monthly Medicare to increase $11.60
Wed Sep 8, 6:33 AM ET Add Business - USATODAY.com to My Yahoo!
By Julie Appleby, USA TODAY
Federal officials say rising costs, increased payments and some new benefits mean Medicare must raise its Part B premium 17% next year for most of the nearly 42 million seniors and disabled people covered by the program. The news was announced Friday afternoon.
• Health care premiums jump 11.2%, less than last year
• TXU to peg some customers' rates to credit scores
• Hurricane recovery sends jobless claims down
• Expect Chapter 11, pilots told
• Tech industry presents less-than-unified defense
Q: How much is the increase, and who will pay it?
A: Most beneficiaries choose to sign up for Part B of Medicare, which covers doctor visits, outpatient hospital services and some medical equipment and home health services.
The Part B premium will increase $11.60 a month to $78.20.
The increase would not apply if it exceeds an enrollee's Social Security (news - web sites) cost-of-living adjustment. Also, some Medicare members who are also covered by Medicaid may not see an increase.
Q: Is this the largest increase ever?
A: In dollar terms, yes. As a percentage, it is the largest increase since 1989, when Part B premiums rose 28.6%, or $7.10 a month, after Congress passed a bill to provide so-called catastrophic coverage to help patients with large medical bills. But that coverage drew opposition from some seniors and was repealed. As a result, Medicare premiums dropped 10.3% in 1990. This year, premiums rose 13.5%.
Q: Why did the premium increase?
A: Rising health care costs, additional money into a reserve fund, new benefits such as a "welcome to Medicare" physical, as well as additional payments for doctors, insurers and outpatient hospital services.
Q: How much do Medicare members pay for such new benefits?
A: When Congress passes legislation to add benefits or increase payments under Part B, the law requires that 25% of the increase be paid by Medicare enrollees. The rest is funded by taxpayers out of the federal budget.
Q: Where will most of the money go?
A: The Centers for Medicare & Medicaid Services says that about four-fifths of the increase will go to cover additional costs in the traditional program and one-fifth to the network of private insurers that offer HMOs and other alternatives to traditional Medicare.
Q: How much will doctors get?
A: Doctors will get the largest chunk of the increase. They were slated to take a 4.5% pay cut in the Medicare program next year. Instead, Congress authorized an increase of 1.5% in response to concerns that more doctors were opting out of the program or refusing to take new patients, citing low payments. Total payments to doctors are projected to hit $55 billion in 2005, up from $52.7 billion this year.
Q: What about the private health plans?
A: Congress voted to pay private health plans an additional $1.8 billion over 10 years, with the money to go toward improving benefits or paying medical providers more.
Congress was responding to complaints from insurers that that they were being underpaid. Many had dropped out of the program or withdrawn from expensive regions, causing enrollment to drop. A portion of next year's premium increase will help cover the additional payment to insurers.
Q: Are those payments controversial?
A: Yes. Some critics say that raising premiums for nearly 42 million people to pay additional money to private plans, which currently cover 4.6 million members, is unfair. Some critics also say private insurers cost the program about 8% more than traditional Medicare, based on data from the Medicare Payment Advisory Commission.
Medicare Advantage supporters question those numbers, saying they leave out insurers' cost of payments to teaching hospitals for graduate medical education. They also say Medicare Advantage offers additional benefits the traditional program does not, such as lower out-of-pocket costs, disease management programs and, in some plans, prescription drug coverage.
Medicare chief Mark McClellan said Tuesday that the premium increases are more than offset by reductions in out-of pocket payments for those in Medicare Advantage programs. Those in traditional Medicare, he said, are also seeing new benefits, including screening exams for cholesterol and diabetes.
Q: Are there other changes?
A: Yes. Under Medicare Part A, which pays for hospital costs, the deductible for a hospital stay will rise to $912, up from $876 this year. Medicare patients who have joined a Medicare Advantage plan may pay a lower hospital deductible, or none at all.
Q: Does the new drug benefit, slated to start in 2006, figure into the increase?
A: No. Medicare members will have the option to enroll in drug coverage in 2006 and will pay an estimated $35 a month in a new Part D premium. |
