The standard monthly premium for Medicare Part B in 2007 will increase to $93.50 from $88.50, CMS Administrator Mark McClellan announced on Tuesday, the Washington Post reports.
CMS officials said that the 5.6% increase in the monthly premium is the smallest since 2001 (Lee, Washington Post, 9/13). The monthly premium includes calculations of a scheduled 5% reduction in Medicare physician reimbursements in 2007, "but Congress has reversed such cuts four years in a row," the Wall Street Journal reports. McClellan said that, in the event Congress reverses the scheduled reduction in Medicare physician reimbursements, the monthly premium would increase by $1.50. CMS officials earlier this year estimated that the monthly premium in 2007 would increase to $98 and on Tuesday attributed the smaller increase to physicians "filing claims faster and getting paid more quickly," the Journal reports (Zhang, Wall Street Journal, 9/13). Higher-income beneficiaries in 2007 for the first time will pay a higher monthly premium than other beneficiaries, as ordered by a provision in the 2003 Medicare law. Under the provision:
- Individuals with annual incomes between $80,000 and $100,000 and married couples with annual incomes between $160,000 and $200,000 in 2007 will pay a monthly premium of $106;
- Individuals with annual incomes between $100,000 and $150,000 and married couples with annual incomes between $200,000 and $300,000 in 2007 will pay a monthly premium of $124.70;
- Individuals with annual incomes between $150,000 and $200,000 and married couples with annual incomes between $300,000 and $400,000 in 2007 will pay a monthly premium of $143.40; and
- Individuals with annual incomes of $200,000 or more and married couples with annual incomes of $400,000 or more in 2007 will pay a monthly premium of $162.10 (Pugh, Miami Herald, 9/12).
McClellan said that the means testing will reduce Medicare costs by $7.7 billion over five years and $20 billion over 10 years (Appleby,
USA Today, 9/13). CMS officials estimated that means testing will prompt 9,000 higher-income Medicare beneficiaries to leave the program in 2007 and 30,000 to leave by 2010 (Washington Post, 9/13).
McClellan Comments
"Most Medicare beneficiaries will see relatively modest cost increases compared with recent health care trends," McClellan said (USA Today, 9/13). McClellan said "a modest slowdown in physician spending growth" contributed to the smaller increase in the monthly premium, but he raised concerns about "very rapid growth in spending for hospital outpatient services." McClellan that said many services provided in outpatient hospital clinics "could be performed less expensively and more conveniently in a physician's office." In addition, McClellan said that means testing will have "a very positive impact, making Medicare more sustainable in the long term."
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