Medicare Premiums to Rise 3.1 Percent

WASHINGTON — Medicare premiums will increase by 3.1 percent next year, the lowest increase in six years, federal officials announced Monday.

The standard monthly premium for Medicare Part B, which covers physician and related outpatient services, will increase from the current $93.50 to $96.40.

Individuals earning more than $82,000 a year will pay a sliding scale of higher premiums, up to a maximum of $238.40 for those earning above $205,000.

The deductible for Part B services will increase from $131 to $135, after which Medicare pays 80 percent of allowable charges.

The annual deductible for Medicare Part A, which covers hospital inpatient services, will increase from $992 to $1,024 for the first 60 days.

Patients who stay in the hospital between 61 and 90 days would pay $256 a day, and those who stay beyond 90 days would pay $512.

Despite the lower than normal increase in monthly premiums, "we continue to be concerned about the growing cost of health care," said Kerry Weems, acting administrator for the federal Centers for Medicare and Medicaid Services.

The monthly Medicare premiums would have been around $99 but for the discovery of an accounting error in which some costs associated with the hospital Part A program where charged to the Part B physician services program during fiscal 2005 through 2007, said Rick Foster, CMS's chief actuary.

Three factors accounted for the increase for next year:

— The continued increase in medical costs.

— The expectation that Congress will rescind a scheduled 10 percent cut in physician payment fees next year.

— Higher costs in the managed-care Medicare Advantage program, either because plans are enrolling a less healthy population or are coding treatments at a higher rate than before.

Foster called that adjustment for the accounting error a "one-time" correction. He estimated that monthly premiums in 2009 could increase in the range of 4 percent to 5 percent.