Medicare premium rise won’t go steep

— About 45 million retired and disabled people will pay lower-than-projected Medicare premiums for doctor visits and other outpatient services next year, the United States said.

Monthly premiums for Medicare’s Part B program will be $99.90 in 2012, a 3.6 percent increase from the current standard payment of $96.40, the Centers for Medicare and Medicaid Services said Thursday. The figure for 2012 is lower than the $106.60 projected earlier this year by Medicare trustees.

The premium increase will be offset by a projected cost-of-living adjustment to Social Security averaging $43 a month next year, officials said. In addition, the Part B deductible will be $140, a $22 decrease from this year.

The announcement may bring relief to senior citizens facing health-care costs that are rising faster than inflation, said David Certner, legislative policy director for AARP, a Washington lobby group, in a telephone interview. “Obviously, though, Part B costs are just one part of their total health-care costs,” he said.

Medicare’s Part B program covers doctor visits, outpatient hospital services, some home health services and medical equipment. Officials attributed the lower-than-expected increase to lower use of services.

Most Medicare beneficiaries have paid $96.40 per month for Part B since 2008 because of a law that freezes premiums in years they don’t receive increases in their Social Security checks. In 2012, those recipients will pay a standard Part B premium of $99.90, amounting to a monthly change of $3.50.

About a quarter of Medicare beneficiaries who pay higher premiums because they recently enrolled or have higher incomes will see premiums decrease by $15.50 a month, from $115.40.

Health and Human Services Secretary Kathleen Sebelius said it’s “pretty remarkable” that premiums will stay in check. She reassured senior citizens that they have nothing to fear from the Obama administration’s 2010 health care law, which cut Medicare spending to help finance coverage for the uninsured.

“Thanks to the Affordable Care Act, Medicare is providing better benefits at lower cost,” said Sebelius.

A spokesman for Republican Sen. Orrin Hatch of Utah said the brunt of the health law’s Medicare cuts is still to come. “More importantly,” added Antonia Ferrier, “lower Medicare premiums are being driven by lower than average Medicare spending due to the slow economy,” not the healthcare law. Hatch is the ranking Republican on the Senate panel overseeing Medicare.

A spokesman for House Ways and Means Chairman, Dave Camp, R-Mich., said premiums are more affordable because senior citizens on tight budgets are spending less on health care in a troubled economy.

A leading nonpartisan expert on Medicare said she doubted election-year politics were behind the lower-thanexpected premiums for 2012.

“Changes in premiums are obviously important to seniors, but the numbers are based on what the law requires and determined by independent actuaries rather than politics,” said Tricia Neuman of the Kaiser Family Foundation.

Neuman said the explanation probably concerns the relationship between Medicare premiums and Social Security cost-of-living adjustments.

“More people are sharing the smaller-than-expected increase, so that is spread over a larger number of people,” said Medicare chief Don Berwick. Administration officials say they’ve also seen a slowdown in the use of health-care services throughout the economy, not just among senior citizens.

STATE SPENDING TO RISE

State spending in the United States on Medicaid will surge 29 percent this year, even as governors slash the health program’s benefits and payments to hospitals and doctors, a survey showed.

States will have to spend more on the health program for the poor to offset the loss of $100 billion in U.S. funds authorized by the 2009 economic stimulus law and to accommodate higher enrollment because of the flagging economy, according to an annual survey of Medicaid officials released Thursday by the Kaiser Family Foundation.

“Unemployment remains high with increasing numbers of poor and uninsured keeping pressure on state budgets and Medicaid programs to meet growing needs,” said Diane Rowland, executive vice president of the Menlo Park, Calif.-based health-policy research group, in a statement.

The foundation’s estimate of a 29 percent increase in state spending is based on projections provided by state Medicaid officials. The survey didn’t ask how much states expect to spend in dollar figures.

States are “cannibalizing from education, transportation, corrections, everywhere else” in their budgets to pay for Medicaid, Matt Salo, executive director of the National Association of Medicaid Directors in Washington, said Thursday in a telephone interview. “In any given state, literally every dollar of new revenue that’s coming in is all going to Medicaid.”

Medicaid is a joint statefederal program. States andthe U.S. government were expected to spend about $442 billion combined on the health plan in 2011, according to the Centers for Medicare and Medicaid Services, with the federal government paying about 61 percent of the total.

Under the 2010 health-care overhaul, which will expand Medicaid beginning in 2014, states are prohibited from cutting enrollment by reducing eligibility or making it harder for people to sign up. Governors have responded by cutting benefits and payments to providers instead.

Forty-six states plan to freeze or reduce payments to hospitals or other health providers this year, Kaiser said.Thirteen states have eliminated at least one benefit in the last two years, such as dental care, and “almost all states have been making substantial changes in Medicaid pharmacy programs,” the group said, such as requiring state approval for prescriptions that aren’t on a “preferred drug list.”

“Many of the latest cuts will hit at the core of the Medicaid program,” Rowland said.

Most of the projected 29 percent increase in state spending “is really just to keep people on the program,” said Joy Johnson Wilson, health policy director for the National Conference of State Legislatures in Washington. “We knew it was a big hole because the economy hasn’t improved that much - not enough to get people into jobs and off of Medicaid.”

Fourteen states increased copayments for Medicaid beneficiaries this year, and 24 expanded enrollment inmanaged-care plans. About two-thirds of the nation’s 54 million Medicaid patients were enrolled in some kind of managed care plan in October 2010, the foundation said.

Information for this article was contributed by Carol Eisenberg and Alex Wayne of Bloomberg News and by Ricardo Alonso-Zaldivar and Stephen Ohlemacher of The Associated Press.

Front Section, Pages 1 on 10/28/2011

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