MEDICARE B PREMIUM HIKE INCLUDES MEANS TESTING

Most elderly and disabled people on Medicare will see their premiums rise to $93.50 per month next year, a 5.6 percent increase. That's lower than anticipated, but for the first time in the program's 41-year history, wealthier beneficiaries will pay more for Medicare Part B, the insurance that covers doctors' visits and outpatient hospital care.

The higher payments will apply to about 1.5 million beneficiaries with incomes of more than $80,000 a year. For individuals who earn more than $80,000, or couples who earn more than $160,000, premiums will jump to $106. That amount goes up even more for seniors with higher incomes. For the wealthiest seniors, the monthly premium would go to $162. Congress approved means testing in the 2003 law that created the Medicare drug benefit.

Mark McClellan, administrator for the Centers for Medicare and Medicaid Services, said that wealthier seniors will still get a significant government subsidy when participating in the program. "They're still getting a subsidy on their Part B insurance of more than $2,400 next year," he said. "That still makes it a very attractive insurance package." Meanwhile, the higher payments from the wealthy are expected to reduce the government's costs by $20 billion over the next 10 years.

Shannon Benton, executive director of an advocacy group called TREA Senior Citizens League, said the higher premiums seem fair at first glance, but could come back to haunt the poorest and sickest beneficiaries. "As wealthy seniors abandon Medicare as it becomes more expensive and choose private insurance instead, only the poorest and sickest will be stuck in Medicare, driving up costs for everyone left behind," Benton said.

-Adapted from: “ Medicare Premium Hike Less Than Expected” by Kevin Freking, Associated Press Writer, September 12, 2006, at:
www.newsday.com/news/health/wire/sns-ap-medicare-premiums,0,2226482,print.story (referenced by ElderLawAnswers.com)

9/06