Medicare premium, deductible rising in 2001
Out-of-pocket rates for most beneficiaries increase
Out-of-pocket costs for most Medicare beneficiaries will increase under the 2001 rates announced by the Department of Health and Human Services (HHS) in October.
The rates for the Medicare Part A deductible and Part B monthly premium amounts paid by beneficiaries are recalculated each year to reflect changes in health care costs and Medicare law. The Medicare Part B monthly premium will be $50 in 2001, an increase of $4.50 from this year. The Part B premium covers physician services, hospital outpatient care, durable medical equipment, and other services outside hospitals. Most of Medicare’s 39 million beneficiaries use this voluntary coverage.
The Part B premium has been relatively flat in recent years. The premium did not increase last year, but increased $1.70 in 1999, and did not increase in 1998. Accounting for inflation, the premium has risen by less than a dollar since 1994.
Increase is below expectations
Estimates following enactment of the Balanced Budget Act (BBA) of 1997 had projected that Part B premiums would increase from $43.80 in 1997 to $59.40 in 2001, a four-year increase of more than $15. However, the premium announced for 2001 represents an actual four-year increase of less than $7.
HHS also announced that the Part A deductible for inpatient hospital care will rise by $16, to $792. This increase is about 2%, reflecting savings from reductions in Medicare hospital payments and other program changes signed into law in the BBA to help protect and preserve the Medicare Hospital Insurance Trust Fund. Last year, the deductible rose by $8.
The Part A deductible is a beneficiary’s only cost for up to 60 days of Medicare-covered inpatient hospital care. The daily cost to beneficiaries for hospital days 61 through 90 in a benefit period is rising by $4, to $198 per day, and by $8, to $396 per day, for hospital days beyond the 90th in a benefit period. The skilled nursing facility daily coinsurance amount, which must be paid after the first 20 days of such care in a benefit period, is rising by $2, to $99 per day.
The Part A premium, paid by only a small percentage of beneficiaries, is decreasing again in 2001. For the beneficiaries who pay a premium for Medicare Part A coverage, premiums will decrease by $1, to $300. This amount is paid by seniors with less than 30 quarters of Medicare-covered employment. Seniors with 30 to 39 quarters of Medicare-covered employment are entitled to a reduced monthly premium, which is falling by $1, to $165.
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