Medicare premium will increase in U.S.

Older Americans will have to pay about 17 percent more next year for their government-run health insurance, U.S. officials announced on Friday. Starting in January, the elderly will pay $78.20 per month for non-hospital services, up $11.60 from $66.60 this year, the Centers for Medicare and Medicaid Services said. Most of the increase will cover the program's new prescription drug coverage and preventive services, including an initial physical exam and other tests, said Mark McClellan, head of the federal health insurance program for the elderly and disabled. The remaining amount, about 25 percent, will be used to help build up Medicare's trust fund, he said, adding that the higher upfront costs will help save money elsewhere. "Medicare beneficiaries are saving money. They're paying a little more in premiums, but they're getting more savings in their out-of-pocket costs as a result," McClellan said. But the premium increase is likely to renew controversy over the cost of the new Medicare law passed last year, informs Reuter. According to Detroit Free Press, medicare premiums for doctor visits will rise 17 percent next year, the largest increase in the program's 40-year history, the Bush administration said Friday. Monthly payments for Part B of the government health care program - doctor visits and most other non-hospital expenses - will jump to $78.10 from $66.60. The premiums are updated annually under a formula set by law. The federal government picks up about 75 percent of the cost of Part B benefits and beneficiaries pay the rest. Bloomberg reports that medicare patients' monthly premiums for outpatient care will jump a record $11.60 next year, while deductibles for hospitalized patients will rise $36, the biggest jump in 14 years. The hospital deductible will rise 17.4 percent to $912 on Jan. 1, and the monthly premium for a doctor's care will increase 4.1 percent to $78.20, the Centers for Medicare and Medicaid Services said. Social Security income increases are likely to be less than 3 percent in 2005, said Robert M. Hayes, president of the Medicare Rights Center in New York. The increase ``is a body blow to millions of older Americans living on fixed incomes,'' Hayes said in an e-mailed statement. ``Older Americans already are staggering under the relentless increases in the cost of prescription drugs.'' The premium jump is mostly the result of a 1.5 percent increase in physician payments under last year's Medicare law and new preventive services such as a physical for patients enrolling in the program, Mark McClellan, who heads Medicare, told reporters on a call. The government also is building reserves. ``It's hard to know if it would cause people to delay things or put off treatment until you see some history after something like that is implemented,'' said Jeff Prescott, a spokesman for HCA Inc., the biggest U.S. hospital chain. ``Medicare recipients are pretty good about seeking treatment because their coverage is pretty good. They don't tend to ignore things as much as people who have managed care plans.''

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