Medicare premiums and deductibles increase for 2002 - Updata - Brief Article

Healthcare Financial Management, Dec, 2001

The Medicare Part A deductible for inpatient hospital care will increase from $792 to $812, the Centers for Medicare and Medicaid Services (CMS--formerly HCFA) announced in an October 26, 2001, Federal Register notice. The Part A deductible, which helps pay for hospital, skilled nursing, hospice, and some home health care, is a beneficiary's only cost for up to the first 60 days of inpatient hospital care. However, beneficiaries must pay an additional deductible amount for stays exceeding 60 days. For hospital stays between 61 and 90 days, the Part A deductible will increase by $5 to $203 per day. For stays beyond 90 days, the deductible will increase by $10 to $406 per day. The deductible for skilled nursing facility stays longer than 20 days (through the 100th day) will increase by $2.50 to $101.50 per day. Part A deductibles apply only to senior citizens in fee-for-service Medicare plans.

Premiums for Part A for senior citizens who paid into the Medicare program for less than 30 quarters will increase from $300 to $319. Part A premiums for senior citizens who made 30 to 39 quarters of contributions to the Medicare program will increase $10 to $175. Beneficiaries who contributed to the program for 40 or more quarters do not pay premiums.

The Medicare Part B monthly premium will increase from $50 to $54 in 2002. Part B premiums cover physician services, ambulatory care, durable medical equipment, and other services provided outside of hospital settings.

Overall, the percentage increases in Part A and B premiums are low compared with those experienced by most private-sector employer and self-insured plans this year, which have amounted to 15 to 30 percent. Such premium increases are attributable in part to the fact that, unlike Medicare, most private insurance provides prescription-drug coverage. Nonetheless, the increases in the Medicare deductibles and coinsurance reflect an industry-wide trend of cost shifting to the consumers.