CMS on Friday announced that monthly outpatient care premiums for about 95% of Medicare recipients will remain at $96.40 in 2009, the San Francisco Chronicle reports (Colliver, San Francisco Chronicle, 9/20).
The premium covers a portion of the costs of physician services, home health care and certain durable medical equipment. The outpatient deductible for beneficiaries also will remain unchanged at $135. Premiums for the outpatient benefit, known as Part B, will increase only for single beneficiaries with annual incomes greater than $85,000 and couples with incomes greater than $170,000 (Young, The Hill, 9/19).
The announcement marks the first time since 2000 that rates will not increase, and only the fifth time since 1976 (Freking, AP/Seattle Post-Intelligencer, 9/19). Health care costs increased compared to inflation this year, but other atypical factors led to the static premiums, according to Medicare officials. The AP/Post-Intelligencer reports that $9.3 billion in hospice payments that mistakenly were taken from the outpatient benefit fund from 2005 to 2007 were returned to Part B, helping to offset premium increases. In addition, Part B premiums have increased in recent years in part because Medicare was building reserves to offset changes made to physician payments, but those reserves now are complete. Richard Foster, head actuary for Medicare, said, "It was painful to catch up, but now we have one year in which we can get rid of the catch-up amount and use that to offset the premium increases that otherwise would have happened" (San Francisco Chronicle, 9/20). However, Foster said, "In the future, we're going to have to go back to raising the premiums to match the increase in expenditures" (AP/Seattle Post-Intelligencer, 9/19).
Deductibles for inpatient services will rise by $44 to $1,068 in 2009. The benefit, known as Part A, covers the first 60 days of hospital care, with patients facing daily copayments beyond that point (Carey, CQ HealthBeat, 9/19).
Increase Expected in 2010
The Chronicle reports that the unusual occurrences that led to unchanged premiums in 2009 will not extend to 2010 (San Francisco Chronicle, 9/20). According to CQ HealthBeat, the financial buffer that allowed premiums to remain unchanged in 2009 likely will not exist in 2010 because lawmakers likely will offset a planned 20% reduction in Medicare physician reimbursement rates. "It is reasonably likely (lawmakers) won't let a 20% reduction in Medicare fees stand," Foster said (CQ HealthBeat, 9/19). He added, "Next year is going to be a little ugly, I'm afraid" (San Francisco Chronicle, 9/20).
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