Medicare Part B Premiums Expected To Increase 12% in 2006

Sunday, April 3, 2005

BALTIMORE - Premiums for Medicare Part B, which covers physician services, outpatient hospital care, some home health services and durable medical equipment, will increase by an estimated 12% in 2006, from $78.20 to $87.70 per month.

In 2005, Medicare Part B premiums increased by 17%. In the Wall Street Journal, CMS Chief Actuary Richard Foster said that Medicare Part B premiums could increase by a higher percentage in 2006, based on whether reimbursements to physicians decrease as scheduled next year.

Medicare is scheduled to reduce reimbursements to physicians by 5% on Jan. 1, 2006, but Foster said, "I don't think that's going to happen" because Congress likely will prevent the decrease.

If Congress increases Medicare reimbursements to physicians by 1.5% in 2006, Part B premiums would increase by 14% to 15%, Foster told the Journal. The American Medical Association has recommended a 2.7% increase in Medicare reimbursements to physicians for 2006.

"Many of tomorrow's Social Security beneficiaries might not be able to afford their Medicare benefits," said Foster. "That could slow down their consumption of health care in a way that none of us wants."

However, CMS spokesperson Gary Karr said the new Medicare prescription drug benefit scheduled to take effect in 2006 would offset the estimated increase in Medicare Part B premiums.