HHS announces 2001 Medicare premium and deductible rates

The Department of Health and Human Services has announced the 2001 rates for the Medicare part A deductible and part B monthly premium amounts paid by beneficiaries. These amounts are recalculated each year to reflect changes in healthcare costs and Medicare law.

The Medicare part B monthly premium, which covers physician services, hospital outpatient care, durable medical equipment and other services outside hospitals, will be $50 in 2001, an increase of $4.50 from 2000 but still significantly lower than earlier projections.

"While the increase for 2001 is necessary to cover higher costs and legislative changes, we have still succeeded in significantly holding down part B beneficiary premiums over recent years," said Michael Hash, acting administrator of the Health Care Financing Administration. "Total premium increases for our beneficiaries have been less than half the amount originally projected when the Balanced Budget Act was passed."

Estimates following the enactment of the Balanced Budget Act of 1997 had projected that part B premiums would rise from $43.80 in 1997 to $59.40 in 2001, a four-year increase of more than $15. However, the premium for 2001 represents an actual four-year increase of less than $7.

Part A deductible

The Department of Health and Human Services also announced that the part A deductible for inpatient hospital care will rise by $16, to $792. This increase is only about 2%, reflecting savings from reductions in Medicare hospital payments and other program changes signed into law in the BBA to help protect and preserve the Medicare Hospital Insurance Trust Fund. Last year, the deductible rose by $8.

The part A premium, paid by only a small percentage of beneficiaries, is decreasing again in 2001. For the 388,000 beneficiaries who pay a premium for Medicare part A coverage, premiums will decrease by $1, to $300. This amount is paid by seniors with less than 30 quarters of Medicare-covered employment (and by certain people with disabilities who are under 65, have lost disability benefits because of work and earnings, and have less than 30 quarters of Medicare-covered employment). Seniors with 30 to 39 quarters of Medicare-covered employment (and certain people with disabilities who are under 65, have lost disability benefits because of work and earnings, and have at least 30 quarters of Medicare-covered employment) are entitled to a reduced monthly premium, which is falling by $1, to $165.

States have programs that pay some or all of beneficiaries' Medicare premiums and coinsurance for certain people who have Medicare and low incomes. PR