Patients Benefit From Level Medicare Part B Premiums in 2009

Most Medicare beneficiaries will not see their monthly outpatient care premiums increase in 2009, making this the first time since 2000 that Medicare Part B rates have not gone up from the previous year for the majority of Medicare beneficiaries, according to a Sept. 19 fact sheet from CMS.

The monthly premium rate for outpatient care, also known as Medicare Part B, will remain at $96.40 next year, while the outpatient deductible for beneficiaries will remain unchanged at $135 per month for 95 percent of Medicare beneficiaries, which includes single beneficiaries with incomes less than $85,000 a year and couples with incomes less than $170,000 annually. Medicare Part B covers some of the costs for physician services, home health care and certain durable medical equipment. Part B premiums will increase slightly for single beneficiaries with incomes greater than $85,000 a year and couples with incomes exceeding $170,000 annually, according to CMS.

In July, Congress passed an 18-month Medicare physician payment bill that negated steep reductions in the physician payment rate under Medicare Part B for the remainder of this year and next year and actually provided physicians with a slight payment increase. But without congressional intervention, physicians will face a 20 percent reduction in the Medicare payment fee on Jan. 1, 2010. Although Medicare Part B premiums do not directly impact physician payment rates under the program, stable premiums could create a greater demand for Part B services at a time when family physicians are struggling with inadequate Medicare payments and the threat of a massive Medicare payment reduction in 2010, according to analysts.

In most cases, the Part B premium increases at the same rate as average Part B expenditures from year to year, and although increases are expected to occur under Part B in 2009, other factors will negate those Part B increases for Medicare beneficiaries, allowing the rates to remain flat, according to CMS.

"For the last several years, Part B premiums have included an extra amount that, together with matching general revenue financing, has been used to restore the assets of the Part B trust fund account to an adequate level, " said Richard Foster, CMS chief actuary. "Now that assets are adequate, we can eliminate the extra premium amount."

Part B also received $9.3 billion to reimburse it for certain Medicare Part A hospice payments that were inadvertently drawn from the Part B account, according to Foster.

"Together, these factors offset the increase in the premium that would otherwise have been required," he explained.

Paul Precht, director of policy and communication for the Medicare Rights Center, said, "the fact that the Medicare Part B premium is not going up next year will mean a lot to folks, particularly when we are in such tough economic times with gas prices going up and people's 401(k) retirement plans being hit."