October 20, 2009
Basic Medicare Premium to Rise 15% Next Year
By ROBERT PEAR
WASHINGTON — The basic Medicare premium will shoot up next year by 15 percent, to $110.50 a month, federal officials said Monday.
Who needs health care reform? And will reform contains prices?
The increase means that monthly premiums would top $100 for the first time, a stark indication of the rise in medical costs that is driving the debate in Congress about a broad overhaul of the health care system.
About 12 million people, or 27 percent of Medicare beneficiaries, will have to pay higher premiums or have the additional amounts paid on their behalf. The other 73 percent will be shielded from the increase because, under federal law, their Medicare premiums cannot go up more than the increase in their Social Security benefits, and Social Security officials announced last week that there would be no increase in benefits in 2010 because inflation had been extremely low.
So who eats the costs?
Kathleen Sebelius, the secretary of health and human services, urged the Senate to approve a bill, already passed by the House, to block the scheduled increase in Medicare premiums.
“We are in tremendously difficult economic times, and seniors are being hit particularly hard,” Ms. Sebelius said. “The last thing seniors need right now is a substantial increase in their Medicare premiums, and many seniors will see such an increase if no action is taken.”
Among those who face higher premiums next year are new Medicare beneficiaries, high-income people and those whose Medicare premiums are paid by Medicaid. Premiums can be as high as $353.60 a month, or more than $4,200 a year, for Medicare beneficiaries who file tax returns with adjusted gross income greater than $214,000 for an individual or $428,000 for a couple.
High-income people can afford it, those whose premiums will be paid by Medicaid means the federal government.
The higher premiums will impose “an additional and significant burden” on states, which help pay Medicaid costs, along with the federal government.
O, and states.
The House bill was passed, 406 to 18, on Sept. 24. Among those who voted against it was the Democratic leader, Representative Steny H. Hoyer of Maryland, who said he saw no need to help multimillionaires at a time when the nation was struggling to rein in entitlement programs.
While lawmakers considered whether to freeze Medicare premiums, a handful of senators met behind closed doors on Monday to work out a compromise health care bill to cover the uninsured.
One participant, Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee, said senators were considering new ideas to finesse disagreements over whether the government should offer its own health insurance plan, in competition with private insurers.
Under one proposal, he said, the government would create a public plan, but states could “opt out” if they wanted to devise and operate their own insurance programs.
The meeting, convened by the Senate majority leader, Harry Reid, Democrat of Nevada, included Mr. Baucus and Senator Christopher J. Dodd, Democrat of Connecticut, who presided over the health committee when it approved a sweeping health care bill in July.
Mr. Reid said he hoped to take a compromise bill to the Senate floor early next month. But that assumes rapid progress in negotiations and a quick analysis by the Congressional Budget Office, to confirm whether the 10-year cost of the bill is under the $900 billion ceiling set by President Obama.
The Finance Committee approved a detailed outline of a sweeping health care bill last week. Mr. Baucus formally introduced the bill, a 1,502-page document, on Monday.
The Senate is debating a separate bill to prevent deep cuts in Medicare payments to doctors. The bill would not offset any of the costs, estimated at $247 billion over the next 10 years.
Senator Lamar Alexander of Tennessee, the No. 3 Republican in the Senate, said: “Of course, we need to fix doctors’ reimbursement. But it needs to be paid for. We can’t just add a quarter-trillion dollars to the national debt.”
Democrats said the bill simply recognized political reality. In recent years, they said, Congress has repeatedly stepped in to prevent cuts in Medicare payments to doctors, and it is likely to do so in the future.