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CMS: Part B Monthly Premiums $88.50 in 2006

SEPTEMBER 16, 2005 -- Rapid growth in physician office visits, laboratory tests, and other medical services is the primary reason why Medicare beneficiaries will pay 13.2 percent more for their Part B monthly premiums in 2006, officials with the Centers for Medicare and Medicaid Services said Friday.

The premiums, which cover physician visits and other outpatient services, will rise to $88.50 in 2006, an increase of $10.30 from the current amount. The increase was roughly the same that CMS actuaries predicted in April.

The increase may complicate prospects for an increase in Medicare physician payments since any increase in what Medicare pays physicians would increase Medicare Part B premiums even further. Physician groups are hoping to prevent a scheduled 4.3 percent 2006 cut in doctor payments.

In a news release, CMS said rapid growth in hospital outpatient services also contributed to the increase, as did a requirement to increase assets that, for accounting purposes, are held in the Part B trust fund. Beneficiaries' premiums cover 25 percent of the program's costs while the federal government pays the other 75 percent.

Bill Vaughan, senior policy analyst for Consumers Union, said the Part B increase is "another wake-up call for the need to get a handle on runaway health inflation."

Increases in imaging and other high-tech services identified by the Medicare Payment Advisory Commission (MedPAC) "must be slowed to keep millions of seniors from sliding toward poverty," Vaughan stated in an e-mail. "Proposals to further increase Part B costs need to be offset with savings in these high-tech services, many of which are more profitable than they are useful to patients."

CMS officials said beneficiaries' out-of-pocket costs will be lower in 2006 due to savings in drug costs from the new Medicare prescription drug benefit (PL 108-173). Due to government financial assistance included in the new benefit, about one of four Medicare beneficiaries will pay little or no premium for either Medicare Part B, the new drug benefit (Part D), or both, next year, CMS stated.

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