Health Care Reform:

Medicare Outpatient Premiums Stay Flat

Sept. 19, 2008 -- Medicare beneficiaries' out-of-pocket costs for doctor visits and other outpatient services won't rise next year, only the sixth time in the history of the program they've remained stable, government officials said Friday.

Premiums and deductibles for hospital stays will go up, officials said.

Medicare announced that premiums for Part B, which covers doctor visits, outpatient services, medical equipment, and other services, will stay at $96.40 per month in 2009. It's the same rate seniors and disabled beneficiaries pay now.

Part B's deductible, the one-time amount seniors pay out-of-pocket before benefits kick in, will also stay the same at $135 per year.

"There's good news in the numbers," said Kerry Weems, the administrator of the Centers for Medicare and Medicaid Services.

At the same time, out-of-pocket deductibles for hospital visits or nursing home care will rise $44 to $1,068 in 2009, Weems said. Most beneficiaries do not pay premiums for hospital coverage.

Richard Foster, Medicare's chief actuary, said it is only the sixth time in Medicare's 40-plus year history, and the first time since 2000, that outpatient premiums have stayed flat.

By law, Part B premiums make up about one-quarter of the total cost of the program each year. When costs go up for physician services or medical equipment, premiums tend to go up along with them.

Physician fees are set to rise 1.2% next year. But Foster said that unexpected surpluses in a federal account means that Part B premiums will not rise in 2009.

"This is largely a one-time adjustment," Foster told reporters. Asked if Medicare premiums and deductibles were likely to continue their usual rise next year, Foster said, "probably."

Nancy LeaMond, executive vice president of AARP, said in a statement that Friday's announcement would let seniors "breathe a sigh of relief."

But the statement from the powerful Washington lobbying group urged lawmakers on Capitol Hill not to rest comfortably. "The average 73-year-old in Medicare has seen his or her premium double since joining the program," LeaMond said.