Medicare raises Part B premium

Sunday, September 25, 2005

WASHINGTON - The Medicare Part B monthly premium will be $88.50 in 2006, an increase of $10.30 from the current $78.20 premium, CMS reported last week.

Part of the premium increase is necessary to increase assets that, for accounting purposes, are held in the Part B trust fund, CMS stated. As the Medicare Board of Trustees noted in their March 23, 2005 report to Congress, a premium increase of 12% or more would be needed in 2006 to prevent a further decline in Part B trust fund assets and to help restore those assets to an adequate level.

About one-fourth of beneficiaries can receive assistance that pays for their entire Part B premium, and about one-third of beneficiaries can receive assistance for their Part D premium, CMS stated.

The premium increase could have been more.

The scheduled statutory reduction of 4.4% in the physician fee schedule rates means that the projected premium increase is significantly lower than would otherwise be the case. If physician payment rates were held constant (physician price change of 0% rather than -4.4%), with no other changes to help reduce Medicare spending, Medicare Part B spending would be approximately $2.4 billion higher in 2006.

In 2006, the Part B deductible will be $124, compared to $110 in 2005.