Medicare Part B Premiums Expected To Increase at Least 12% in 2006

Premiums for Medicare Part B -- which covers physician services, outpatient hospital care, some home health services and durable medical equipment -- will increase by an estimated 12% in 2006, from $78.20 to $87.70 per month, CMS announced on Friday, the Wall Street Journal reports. CMS Chief Actuary Richard Foster said that Medicare Part B still premiums could increase by a higher percentage in 2006, based on whether reimbursements to physicians decrease as scheduled next year. In 2005, Medicare Part B premiums increased by 17% (Lueck, Wall Street Journal, 3/28). Medicare is scheduled to reduce reimbursements to physicians by 5% on Jan. 1, 2006, but Foster said, "I don't think that's going to happen" because Congress likely will prevent the decrease. In the event that Congress increases Medicare reimbursements to physicians by 1.5% in 2006, Part B premiums would increase by 14% to 15%, Foster said. The American Medical Association has recommended a 2.7% increase in Medicare reimbursements to physicians for 2006.

Reaction
Edward Hill, president-elect of AMA, said that the estimated increase in Medicare Part B premiums in 2006 indicate factors other than reimbursements to physicians, such as new preventive benefits and expenditures for laboratory, ambulance and home health care services. He added, "Without Congress' intervention to stop scheduled cuts in physician payments, Medicare patients' access to physician services will be in jeopardy." John Rother, policy director for AARP, said that increases in Medicare Part B premiums place "real pressure on the incomes of seniors, particularly those with modest income and those who get most of their income from Social Security" (Freking, AP/Detroit News, 3/26). Foster added, "Many of tomorrow's Social Security beneficiaries might not be able to afford their Medicare benefits. That could slow down their consumption of health care in a way that none of us wants" (Wall Street Journal, 3/28). However, CMS spokesperson Gary Karr said the new Medicare prescription drug benefit scheduled to take effect in 2006 would offset the estimated increase in Medicare Part B premiums (AP/Detroit News, 3/28).

Social Security Focus Examined
In related news, the Hartford Courant on Saturday examined how Social Security is "getting most of the political and media attention," despite a report released last week by Medicare and Social Security trustees that found Medicare has more serious financial problems. Some observers maintain that lawmakers have not addressed Medicare reform because the issue is "way down" on the Bush administration's agenda, the Courant reports. However, according to President Bush and many Republicans, the new Medicare law included a number of reforms, and, as a result, the program does not require the "kind of overhaul being considered for Social Security." Meanwhile, experts such as Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare, maintain that lawmakers must reform the "whole health care system" to address the financial problems faced by Medicare (Lightman, Hartford Courant, 3/26).