Medicare costs increase

Most Medicare patients will pay $2.90 more per month in Part B premiums next year -- to $96.40. A majority of patients could also face hikes of $5 to $10 in monthly premiums for Part D, the Medicare prescription drug program, unless they enroll in less expensive plans.
There will also be increases in deductibles for hospital admissions and doctors' visits.

This increase in Part B of 3.1% is the lowest since 2000, but will provide only temporary relief for seniors. The smaller-than-usual hike is artificially low next year because:

Firstly, the Centers for Medicare and Medicaid Services fixed an accounting error that otherwise would have added $2.50 to beneficiaries' monthly premiums.

Secondly the new premium is based on the assumption that physicians will take a 10% cut in their Medicare reimbursement rates next year.

Physician groups have warned that patient access to care will be jeopardized. As per a survey by the American Medical Association of 8,955 physicians unless planned fee cuts are restrained:

• 77% of the physicians surveyed say they'll limit the number of new Medicare patients
• 68% of the physicians surveyed say they will limit the number of their established Medicare patients
  
  
  Congress, as it has for the last 5 years is expected to overturn the cuts or allow a modest increase. The cost will be passed on to beneficiaries in subsequent years to reflect the additional expense.
  

Government costs for health care are expected to soar in the long term unless drastic reform is undertaken.

This is especially true as the first baby boomer applied this month for Social Security. The baby boomer generation is a generation of nearly 80 million born from 1946-1964. Major changes in the health care sytem need to occur before the oldest of the baby boom generation enters the Medicare system.

• Center for Medicare and Medicaid Services (CMS) projects that by 2016, national health care spending will be over $4.1 trillion, and Medicare's share of that will be 21%.

The enrollment of baby boomers plus the prescription drug benefit, which reduces private out-of-pocket spending and increases public spending, are the main factors.

• Medicare officials said that the annual deductible for physician services will increase by $4 to $135 next year.
• The deductible for Medicare Part A, which covers inpatient hospital and hospice care as well as short stays in nursing homes, will increase from $992 to $1,024 next year.
• Medicare beneficiaries have typically paid 25% of their Part B premium cost, while federal taxpayers have covered the rest. By 2009, when means testing is fully phased in, affluent seniors will pick up 35% to 80% of their premium costs.

Beneficiaries in every state will have access to at least one drug plan with premiums of less than $20 a month, and a choice of at least five plans with premiums of less than $25 a month. The national average monthly premium for the basic Medicare drug benefit in 2008 is projected at $25. The open enrollment period for Medicare D drug program for 2008 begins Nov. 15 and ends Dec. 31.


The majority of beneficiaries could avoid any premium increase in 2008 by enrolling in a lower-cost stand-alone plan in their region or utilizing a Medicare Advantage plan with lower prescription drug premiums.

For additional info search the Center for Medicare and Medicaid website:

http://www.cms.hhs.gov/apps/media/press/factsheet.asp

or Kaiser Family Foundation: Health Care Trends

http://www.kff.org/insurance/upload/7692.pdf

or American Medical Association

http://www.ama-assn.org/