Seniors face Medicare premiums jump

[Guest guest]

http://www.cnn.com/2005/HEALTH/03/25/medicare.premiums.ap/index.html

 

Seniors face Medicare premiums jump

 

Friday, March 25, 2005 Posted: 11:04 PM EST (0404 GMT)

 

WASHINGTON (AP) -- Senior citizens can expect at least a 12 percent

increase in their Medicare premiums for doctor visits next year, and

that could rise even higher, if physician reimbursements aren't reduced.

 

Richard Foster, the chief actuary at the Centers for Medicare and

Medicaid Services, said Friday that physicians who treat Medicare

beneficiaries are slated to see a 5 percent cut in their reimbursement

rates beginning January 1. But, Foster said, he would be surprised if

lawmakers allow such a cut to occur.

 

" In real life, I don't think that's going to happen, " Foster said at a

forum on Medicare at the American Enterprise Institute, a conservative

think tank.

 

Over the past two years, physician reimbursement rates have increased

by 1.5 percent annually. If that were to continue, then Medicare

beneficiaries can expect to see a 14 percent to 15 percent increase in

their premiums, Foster said.

 

Trustees for the Social Security and Medicare program estimated in

their report released Wednesday that Part B premiums would jump next

year from $78.20 a month to $87.70 a month. Part B, unlike the

hospital insurance benefits program, is provided only to those who

elect to pay the premiums.

 

Supplemental insurance through Medicare also carries an annual

deductible, projected to rise from $110 to $123.

 

CMS spokesman Gary Karr said the increased premiums would be offset by

a new prescription drug benefit that will save seniors who currently

lack coverage an average of 50 percent. Also, about 6 million

beneficiaries whose only income is Social Security get their premiums

paid through Medicaid.

 

Beneficiaries, through their premiums and other fees, pay for about a

quarter of the expenses for supplemental insurance. Taxpayers pick up

the other 75 percent.

 

Doctors hope for a larger increase than 1.5 percent, and they have

backing from some influential lobbying groups as well as an

independent advisory commission that Congress appointed to advise it

on Medicare issues. That advisory group recently recommended a 2.7

percent increase in reimbursement rates for physicians.

 

The American Medical Association said it's unfair to cut payments to

doctors while the cost of caring for patients escalates. The AMA says

some physicians will stop seeing Medicare patients if the cuts occur.

 

" Without Congress' intervention to stop scheduled cuts in physician

payments, Medicare patients' access to physician services will be in

jeopardy, " said Dr. J. Edward Hill, the AMA's president-elect.

 

Hill said higher premiums reflect a number of factors, not just

physician reimbursement rates. He cited new preventive benefits and

spending for laboratory tests, ambulance services and home health care.

 

Sen. Chuck Grassley, R-Iowa, told the AMA in a speech March 15 that he

agrees there is a problem with the formula used to determine physician

payments. He did not commit to a particular fix, which could cost $135

billion over 10 years.

 

" This will be very expensive to fix, but we need to be creative and

figure it out, " Grassley said.

 

CMS officials declined to say Friday whether the administration

considered physician payments adequate.

 

" We will have more to say about that next week, " Karr said. " Right

now, that's what's in the law. "

 

Premiums for Part B increased 17 percent last year.

 

John Rother, policy director for the older citizens' lobby AARP, said

next year's Social Security cost-of-living increase will likely be

heavily offset by the premium increase.

 

" This puts real pressure on the incomes of seniors, particularly those

with modest income and those who get most of their income from Social

Security, " Rother said.

 

Last year the average cost-of-living increase for Social Security

recipients went up about $25 a month, and about 40 percent of that

went to pay for the increase in Part B premiums, Rother said.

 

" What it means is a declining standard of living for most American

retirees, " he said.

 

Copyright 2005 The Associated Press. All rights reserved.This material

may not be published, broadcast, rewritten, or redistributed.