Washington – Elderly and disabled people will see their Medicare premiums rise 3.1 percent next year to $96.40 a month – the lowest increase in six years.
The good news is temporary, though. The formula used to calculate the premium assumes that physicians will take a 10 percent cut in their reimbursement rates next year, an unlikely occurrence. If, as expected, Congress acts to offset some of that pay cut or to eliminate it, premiums in future years would go up to reflect the additional expense.
Another factor in the lower-than-usual premium increase was the fixing of an accounting error that otherwise would have added $2.50 to beneficiaries’ monthly premiums in 2008.
The Medicare program pays for most of the health care received by about 43 million elderly and disabled people. The program’s expenses have soared in recent years as health care costs go up faster than most other segments of the economy and as more people join the program.
Kerry Weems, the acting administrator for the Centers for Medicare and Medicaid Services, said that rising demand for health care was the primary driver behind the premium increase. Other factors included higher payments to private insurers and setting aside more money for a reserve fund.
