Medicare Announces 'Part B' Premiums For Outpatient Care

WASHINGTON (AP) — Most Medicare beneficiaries will keep paying the same monthly premium for outpatient care next year, the Obama administration said Tuesday.

         But new beneficiaries will pay a larger amount, and upper-income retirees are looking at considerably higher charges.

         Separately, all beneficiaries face a $19 increase in the Part B deductible — the amount they pay for outpatient care each year before Medicare kicks in. That's rising to $166 next year, from the current $147 — the first such increase since 2013.

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         The so-called "Part B" monthly premium is a well-known Medicare yardstick because it's paid by most of the program's 55 million beneficiaries, who generally have the money deducted from their Social Security checks.

         But next year, premiums will vary for different groups of beneficiaries depending on their circumstances.

         Most current beneficiaries will continue to pay $104.90, the same as this year.

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         They're avoiding an increase because of the interaction between their Social Security benefits and Medicare premiums. A federal law protects Social Security recipients from higher Medicare premiums. Since there won't be a Social Security cost-of-living increase next year, their premiums will be unchanged.

         Others will pay more, but nowhere near as much as they would have before the recent budget deal between Congress and the administration.

         Nearly 3 million new beneficiaries will pay $121.80 a month. That's about $38 less per month than was estimated before the budget deal.

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         Upper-income retirees pay considerably more, ranging from $170.50 a month for individuals making more than $85,000 a year, to $389.80 for those making more than $214,000.

         President Barack Obama's tenure in office has seen historically low growth in the nation's health care spending. Government and independent forecasts are looking for medical inflation to pick up again — although not at the fast pace seen before the 2007-2009 economic recession.

         Low cost growth has meant stability for Medicare beneficiaries. The president's health care law also has been gradually closing a coverage gap in the Medicare prescription drug benefit, easing pressure on many retirees.

         Privately insured working families haven't had the same experience during the Obama years, because employers kept passing on to workers a bigger share of health care costs.

         Medicare's announcement comes during the final weeks of open enrollment for prescription drug coverage and private insurance plans under Medicare Advantage. Both of those programs are important components of Medicare, and the administration is forecasting stable premiums.

         However, independent analysts say many Medicare drug plans are raising premiums significantly, and it's important for budget-conscious retirees to shop around this year. They have until Dec. 7.

         Medicare's Part B premium is set by law to cover 25 percent of the cost of outpatient care, with the government picking up the rest. Higher income beneficiaries pay more, since their premiums are set to cover a bigger percentage of costs. Hospital and nursing home care under Medicare is separately financed by a payroll tax equally divided between workers and employers.

         – by AP Reporter Ricardo Alonso-Zaldivar




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