Medicare Outpatient Premiums To Increase for Some Beneficiaries

A provision in the 2003 Medicare law that will require higher-income beneficiaries to pay a higher percentage of their monthly premium costs for Medicare Part B, the Washington Times reports.

Currently, beneficiaries pay 25% of monthly premium costs for Medicare Part B -- which covers outpatient services such as physician visits, physical therapy and X-rays -- and federal government pays the remainder. This year, beneficiaries paid $88.50 monthly for Medicare Part B premium costs, compared with $78.20 last year.

However, single beneficiaries with annual incomes of $80,000 to $100,000 and couples with annual incomes of $160,000 to $200,000 will have to pay 28% of monthly premium costs for Medicare Part B next year and will have to pay 35% in 2009. In addition, single beneficiaries with annual incomes of more than $200,000 and couples with annual incomes of more than $400,000 will have to pay 43% of monthly premium costs for Medicare Part B next year and will have to pay 80% in 2009.

The changes in monthly premium costs for Medicare Part B were scheduled for implementation over five years, but the fiscal year 2006 budget reconciliation law enacted in February expedited the process.

Supporters of the changes in monthly premium costs for Medicare Part B maintain that they are required to help offset increased health care costs and enrollment in Medicare as baby boomers age.

Robert Moffitt, a health policy analyst at the Heritage Foundation, said, "The financial pressures facing Medicare are so severe that we cannot afford to treat everyone the same."

However, some senior advocates oppose the changes. "Now that it has been legitimized, Medicare means-testing thresholds could be lowered by future Congresses, affecting a growing number of beneficiaries," the National Active and Retired Federal Employees Association said.

Sharon Benton, executive director of the Retired Enlisted Association's Senior Citizen's League, added, "It would significantly alter a founding principle of the program -- equality in Medicare and benefits. "(I)t opens the door for more means testing and much higher premium costs for retirees in the future" (Fagan, Washington Times, 3/24).