Medicare Outpatient Premiums Could Jump Next Year, Group Says

Medicare Part B premiums in 2008 could increase by 17%, or $15.90 monthly, to $109.40 monthly, according to a report released on Tuesday by the TREA Senior Citizens League, the Palm Beach Post reports.

Medicare Part B pays for outpatient care such as physician services, durable medical equipment, home health visits and preventive services. The federal government covers about 75% of the cost of Part B, and beneficiaries cover about 25% through premiums.

Individuals with annual incomes that exceed $80,000 and married couples with annual incomes that exceed $160,000 pay higher premiums. According to the Post, the estimates in the report are "based on the rapidly growing deficit between what the program was expected to cost and the actual costs."

For example, although Medicare trustees must include a scheduled 10% reduction in physician reimbursements in estimates of Part B premiums for 2008, the report assumes that Congress will reverse the scheduled reduction. Medicare Part B premiums have increased by 60% over the past five years, compared with 14% for Social Security COLA.

TREA Chair Ralph McCutchen said, "For years, we've been sounding the alarm bell that America's seniors are falling further and further behind, but we've never seen anything quite like these projections. If our annual Social Security increases get eaten up by just one part of Medicare, how are we supposed to keep up with the rising costs of everything from prescription drugs to home heating to groceries?"

However, CMS spokesperson Jeff Nelligan said, "We believe a brief examination of the relevant data leads us to conclude that the situation for 2008 is not nearly so dire as portrayed in the TREA study" (Lipman, Palm Beach Post, 2/13).