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November 18, 2004
RECORD INCREASE IN MEDICARE PREMIUM FOR 2005
The Bush administration has announced that the Medicare Part B premiums will increase a record 17.4% for 2005, the largest increase in the history of Medicare. Other expenses and co-payments will also increase.
Beginning in 1998, Medicare was divided into three parts, known as Medicare Part A, Medicare Part B and Medicare Part C.
Medicare Part A is the part of Medicare that covers the cost of inpatient hospital care. The first 60 days of hospital care is subject to a deductible and days 61 to day 150 are subject to a daily fee. The increases under Medicare Part A for the year 2005 are as follows:
· The deductible for the first 60 days of hospital care has increased from $876 to $912.
· The daily fee for hospital stays from day 61 to day 90 has increased from $219 to $228 per day.
· The daily fee for hospital stays from day 91 to day 150 has increased from $438 to $456 per day.
· The limited nursing home coverage under Medicare for days 21 to day 100 is increased from $109.50 to $114.00 per day.
The medical insurance segment under Medicare is called Medicare Part B. This program started in 1966, at which time the premium was $3 per month. For 2004 your monthly premium is $66.60 and will increase to $78.20 per month for 2005, a 17.4% increase. The deductible under Part B will also increase 10% from $100 to $110. After paying the $110 deductible you are also responsible for paying 20% of the approved Medicare amount for covered services.
Medicare is available to most people over the age of 65 who are entitled to receive Social Security. If you are not entitled to receive Social Security because you had less than 40 quarters of Medicare-covered employment, Medicare Part A can be purchased for a monthly premium. If you have between 30 and 39 quarters of employment you will be able to purchase Medicare Part A for $206 per month, up from $189 in 2004. If you have less than 30 quarters of employment, your monthly premium will increase from $343 to $375 per month.
There are a lot of options available for you to consider in deciding upon your health insurance coverage. The Medicare web site has a section to help you compare health insurance coverages called the “Medicare Personal Plan Finder”. To find this web page, go to www.Medicare.gov. If you don’t like to “surf the web”, I recommend that you visit your local senior center and speak to someone in the Outreach Department. They will be able to explain to you what your options are, and help you decide upon the best medical insurance plan for you.
This article gives general information and not specific advice on individual matters. Persons wanting individualized advice on matters discussed should contact an advisor experienced in those matters. To the extent this article provides information on legal matters, it is based on law in effect in Massachusetts on the date of posting (laws in effect in other states are often quite different).
Ronald H. Surabian is a CPA and attorney who works at the Elder Law Center in Saugus, Massachusetts. He also holds a masters in accounting and a masters in tax law. He currently serves on the board of directors of the Massachusetts Chapter of the National Academy of Elder Law Attorneys. If you have any questions please call me at the Elder Law Center, One Essex Street, Saugus, MA 01906 (781)233-4444. To view this or any prior article, please visit our web site at www.elderlawcenter.org