MEDICARE: Premiums to Increase Nearly 10%

      The federal government announced yesterday that Medicare premiums will rise from $45.50 a month to $50 next year as part of the annual cost-of-living adjustment, the New York Times reports. The average Social Security monthly benefit will increase from $816 to $845, the largest rise since 1992. According to the Times, the increase in Medicare premiums "may jolt beneficiaries ... accustomed to stable premiums in recent years." This year the monthly premium did not rise, and it was $43.80 in both 1997 and 1998. The increase reflects a rise in spending under Part B of Medicare, which provides coverage for physicians' services, outpatient hospital care, medical equipment and "some home health care." Marilyn Moon of the Urban Institute noted that the premium rise comes at a time when seniors are facing increased health care costs, including premiums for supplemental insurance and high prescription drug costs. The Times reports that, according to Moon, this combination "would eat up much of the increase in Social Security benefits." Thomas Saving, an economist at Texas A&M University, said, however, "Some Social Security recipients will be better off than they were before because the cost-of- living adjustment overcompensates for the actual rise in prices" (Pear, New York Times, 10/19).