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Government Announces Annual Medicare Cost Hikes

  • October 23rd, 2001

The Department of Health and Human Services (HHS) has announced legally mandated increases in the Medicare premium, deductible and coinsurance amounts to be paid by beneficiaries in 2002.

For Medicare Part A, which pays for hospital, skilled nursing, hospice care and some home health care, the beneficiary deductible will increase to $812, up 2.5 percent from $792 in 2001. The premium for Medicare Part B, which helps pay for physician services, ambulatory care and other services, will rise to $54 per month, up 8 percent from $50 per month in 2001.

The Part A deductible is a beneficiary''s only cost for up to 60 days of Medicare-covered inpatient hospital care. However, for extended Medicare-covered hospital stays, in 2002 beneficiaries must pay $203 per day for days 61 through 90 and $406 per day for hospital stays beyond the 90th day in a benefit period--up from $198 per day and $396 per day, respectively. For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 will be $101.50, up from $99 in 2001.

The Part A premium, paid by only a small percentage of beneficiaries, also is increasing in 2002. For the estimated 392,000 beneficiaries who pay a premium for Medicare Part A coverage, premiums will increase by $19, to $319. This amount is paid by seniors with less than 30 quarters of Medicare-covered employment (and by certain people with disabilities). Seniors with 30 to 39 quarters of Medicare-covered employment (and certain people with disabilities) are entitled to a reduced monthly premium, which is increasing by $10, to $175.

"Seniors and disabled Americans in fee-for-service Medicare pay higher out-of-pocket expenses than many private health plans," noted HHS Secretary Tommy G. Thompson.

"For some seniors, Medicare+Choice [Medicare managed care] plans offer a reasonable alternative to fee-for-service Medicare''s high out-of-pocket costs, but too many seniors don''t have that option," said Tom Scully, administrator of the Centers for Medicare & Medicaid Services (CMS), which runs the Medicare program. "We have worked throughout the year to do what we can to stabilize the Medicare+Choice program, and we intend to work with Congress to strengthen and modernize it for the long term."

States have programs that pay some or all of Medicare's premiums and coinsurance for certain people who have Medicare and a low income. Information is available at 1-800-MEDICARE (1-800-633-4227) and, for the hearing and speech impaired, at TTY/TDD: 1-877-486-2048.

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Last Modified: 10/23/2001

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