Medicare Beneficiaries Facing Another Double-Digit Premium Hike

Last Updated: 7/14/2006

The Bush administration projects that the premium for Medicare Part B, which covers doctors’ services, will rise at least 11.2 percent to $98.40 a month, in 2007, and the increase may be slightly higher.

The administration attributed the double-digit hike to the fact that more people are turning 65, as well as to a rise “in the volume and intensity of physician and outpatient hospital services over the last several years.”

Premiums are currently $88.50 a month following a 13.2 percent rise from the 2005 figure. The Medicare Part B premium increased by nearly $30 a month, or 51 percent, from 2003 to 2006.

The 2007 premium could go even higher if doctors succeed in blocking a 5.1 percent pay cut that is scheduled to take effect next year. But Congress is also considering a bill that would ease the burden on seniors by revising the formula for calculating premium increases. The actual Part B premium amount for 2007 will be set sometime in the fall.

“We’re going on several years of repeated double-digit increases, and it’s also roughly three times the rate of the Social Security (cost-of-living) increase,” said Kirsten Sloan, chief health lobbyist for AARP. “It puts a real squeeze, particularly on moderate-income seniors.”

For a Seattle Post-Intelligencer article on the premium increase, click on: http://seattlepi.nwsource.com/national/1152ap_medicare_premiums.html